Bulgarian GDP fell 5.1% in 2009 from the previous year – the first time the economy has contracted since 1997, when GDP shrank 5.6%, according to preliminary data from the National Statistical Institute (NSI). Fourth-quarter GDP fell 6.2 % year-on-year. The 2009 slump follows 6% GDP growth in 2008.
In absolute terms, fourth-quarter GDP was BGN 17.78 billion (€9.1 billion) and twelve-month GDP was BGN 66.2 billion, according to NSI’s estimates.
Source: Statistical Office of Bulgaria
Analysis and forecast: Increasing Risk
NSI’s estimates show that Bulgaria’s recession worsened in the final three months of 2009. The results failed to meet most macroeconomic analysts’ forecasts. It appears that the downturn in domestic demand is so serious that even the traditional pre-Christmas boost in consumption was unable to provide much of a stimulus. Bulgaria’s fourth-quarter GDP performance was one of the worst in the EU, trailed by only Romania and the Baltic countries (Ireland has yet to report). Bulgaria is suffering from shrinking consumption, dwindling investments and sliding industrial production, as well as hard-to-get bank loans and a lack of new financial resources. Rising unemployment, tight public spending policies and a slowdown in production will make it difficult to turn this trend around.
Bulgaria’s economy will probably begin growing again in the second half of the year. Most economists expect minimal GDP growth in 2010, partly because of the low base in 2009.