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Bulgarian Economic Growth Under Threat, Says Germany Trade Agency

In the latest issue of its bulletin Bulgarien Aktuell, the Germany Trade and Invest (GTAI) agency wrote about the increased risks threatening the growth of Bulgarian economy. The affected factors are supply chains, tourism, the energy sector, and inflation, as reported in the latest issue of the German-Bulgarian Chamber of Industry and Commerce newsletter sent to BTA.
The war in Ukraine poses a risk for the Bulgarian economy growth. Other adverse effects are the inflation caused by soaring energy prices and the lack of security created by the COVID-19 crisis.
The Bulgarian National Bank (BNB) predicts that the country’s GDP will rise by 3.6 per cent. Early February, the same prediction was for 3.8 per cent. Higher prices, particularly fuel and energy prices, will bring down private consumption, which is an important pillar of productivity within the Bulgarian economy. The BNB expects inflation to rise to 10 per cent.
Diminished tourist flow is another threat for this country’s economy. Representatives of the hospitality industry are worried that foreign tourists will be avoiding destinations along the Black Sea coast. This can be a problem, seeing how tourism accounts for 12 per cent of the country’s GDP and employs approximately 11 per cent of the available work force.
Energy supplies to Bulgaria are strongly dependent on Russia. EU- and USA-enforced sanctions against Russia pose a threat to Bulgarian energy security. Prime Minister Kiril Petkov stated on March 7 that while the Government supports the sanctions, it will request to be exempted from Russian import bans in case such get imposed. Today, about 90 per cent of Bulgarian natural gas and 60 per cent of oil needs are covered by Russia.
There is a risk of the product supply chain through the Varna and Burgas ports getting ruptured, the newsletter says.