GDP growth on a quarterly basis hits its 4-year high.

Economic indicators are improving in almost all fields which means that we are expecting the next year to be even better. This was communicated by Andrea Casini, COO of UniCredit Bulbank during the conference “More Modern, More Competitive, More Powerful” organized by Confindustria Bulgaria and the Italian Institute for Foreign Trade.

The turn to a fiscal policy that is more supportive of growth and the long-awaited employment recovery in the export-oriented part of the economy enabled the real growth of the GDP to reach 1.7% last year, in comparison with 1.1% in 2013. GDP grew with another 0.9% in the first quarter of 2015, which is the biggest increase on a quarterly basis in the last four years.

“The better performance of the economy in the first quarter of the current year is due mainly to the export, while our domestic demand is stabilizing at its levels from the end of last year” Andrea Casini explained.

The overall 13.1% increase in real terms of the Bulgarian export of goods and services in the last semester is the best performance amongst all the emerging markets in the CEE region. These are also the highest levels reached by our country in the last 7 years. This data confirms that the Bulgarian economy is still competitive. The recovery of the export is due mainly to the progressive increase of the productive capacity in the processing industry and in some service sectors. Lower prices of energy in Bulgaria and the weak euro additionally supported the competitiveness of the economy of the country on the foreign markets.

All this takes place against the background of increased trust of business managers and households that reaches levels unseen as from the beginning of the global financial and economic crisis in 2008. The improving attitudes in the industry and to a certain extent surprisingly, in households, mainly contribute to this result. At the same time, the improvement of the expectations regarding the services and the construction business is happening more slowly, which indicates, that recovery remains unequal and more time will be needed until the economy reaches its full potential.

“The improved utilization of EU funds and the stronger export will support the economic growth to reach 2.1% in 2015 and 2.4% in 2016”, the UniCredit Bulbank COO also said during the conference.

The utilization of EU funds at the end of April reached 81%, while the expectations are for values of at least 85-87% until the end of the year, which looks encouraging, given that for the first four years of the process (2007 – 2010) the utilization rate was only 15.6% cumulatively. Meanwhile, 5 out of 7 operational programmes, that will enable Bulgaria to receive another 7.4 billion euro during the next programming period, have already been agreed with the European Union, while the remaining two will probably be given the green light soon. Thus, together with the export and the progressive employment recovery, the improved utilization of funds under the EU programmes will make the progressive acceleration of the economic growth even more visible this year and the next one.

More information for media:

UniCredit Bulbank, Identity & Communications Department

Viktoria Blajeva, Phone: + 359 2 9264 993, wjlj/ebwjepwbAvojdsfejuhspvq/ch

Magdalena Ivanova, Phone: + 359 2 9232 528, nbhebmfob/jwbopwbAvojdsfejuhspvq/ch