After a strong growth in 2022, the Bulgarian economy will slow down, following trends in the European Union, according to a World Bank report.
The World Bank reports that inflation in Bulgaria remains high, which threatens plans to adopt the euro in 2025.
The fiscal deficit is expected to remain below the Maastricht ceiling of 3%, possibly at the expense of reduced public investment.
The new regular government is expected to accelerate the pace of reforms.
Poverty reduction will slow, as Bulgaria faces slower growth and higher inflation. Energy affordability remains a pressing issue.
Analysis by the World Bank indicates that Bulgaria needs a new set of policies and ambitious reforms to stimulate economic growth in order to be able to reach the average income levels in the EU in the next 15 years.
The country needs to address its institutional and governance weaknesses and ensure fair competition to increase the efficiency of firms and the expansion of the private sector.
Investments in people’s skills will also help move the economy closer to the productivity frontier.
If Bulgaria manages to overcome these challenges with an ambitious reform program, it could accelerate its economic growth to over 4% in the period up to 2050. In a no-reform scenario, however, growth could slow to 1.2% until mid-century. (Novinite/Business World Magazine)