According to the Bank’s analysis in the following year the GDP will grow by 1.6% compared to the 1.3% growth in 2014

The Bulgarian economy sees a solid improvement of its competitiveness. This is the conclusion of Kristofor Pavlov, chief economist of UniCredit Bulbank, at the ninth annual conference Deals and Investors, organized by Kapital newspaper. One of the main reasons for this is the recovery of export which in real terms is one fourth above the levels reported in 2008. This in its turn has allowed the Bulgarian economy to step out of recession relatively quickly.

“The remarkable export recovery, however, could not generate sufficiently strong impetus and be transposed to the rest of the Bulgarian economy to the extent we saw this happening in other developing markets“, Kristofor Pavlov further commented. According to him one of the reasons for this is that the structure of export continues to be dominated by the export of raw materials and products with low level of processing (their share over the last decade was over 40%).

Further to being a sign of an economy that is lagging behind, the large share of raw materials in the structure of exports is a problem because there are no conditions for creation of new jobs, says the analysis presented at the conference.

According to the chief economist of UniCredit Bulbank, the recovery process will continue to be slow in 2015 as well. For the next year there is expected a modest growth of foreign demand and individual consumption by a little over one percent. The forecast for investments is for acceleration to 4.4% in 2015.

“The reduction of actual interest rates on loans and of indebtedness will continue in the following year as well. However, in general these will be slow processes and therefore we cannot expect any significant positive impetus to the process of domestic demand recovery coming from this direction”, Kristofor Pavlov explained.

In the conditions of a slow recovery of domestic demand, export will continue to be a driver of the acceleration of GDP growth in the following year as well.

Europe continues to recover at a slow pace, and in some of the developing economies it seems that growth will slow down, as the process of normalization of interest rates in the USA is expected to gain momentum. This in its turn will cause a delay in those developing markets which largely rely on the inflow of foreign savings to finance the growth in consumption and investments.

Based on the expected growth in the 20 main export markets of Bulgaria, the demand for Bulgarian export will increase by 2.1% percent in 2015 compared to the expected 1.7% this year. Against this backdrop, the forecast of the economic team of UniCredit Bulbank expects that the export of goods and services in 2015 will increase in real terms by 2.9%, compared to the expected growth of 2.2% in the present year.

According to the analysis of the bank, in the following year GDP will increase by 1.6%, compared to the 1.3% increase in 2014.

More information for media:

UniCredit Bulbank, Identity & Communications Department

Ekaterina Ancheva, Phone: + 359 2 9264 963, flbufsjob/bodifwbAvojdsfejuhspvq/ch

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