Bloomberg News

Bulgaria’s Economic Growth Slows to Weakest in Four Quarters

November 15, 2011

Nov. 15 (Bloomberg) -- Bulgaria’s economic recovery slowed in the third quarter, shadowing easing growth across the European Union amid the euro-area’s debt crisis.

Gross domestic product grew 1.3 percent compared with 2 percent in the previous three months, the Sofia-based Statistics Institute said today in a preliminary estimate. Seasonally- adjusted GDP was unchanged in the quarter.

The sovereign-debt crisis in the euro area, which buys 60 percent of Bulgaria’s exports, is curbing economic growth in the EU’s poorest country by per-capita GDP as it emerges from its first recession in more than a decade through exports of its metals, machinery, textiles and furniture.

GDP growth will slow at the end of 2011 and in 2012 as the euro crisis erodes demand for Bulgarian exports and domestic demand stagnates, the EU said on Nov. 10. The 27-member bloc estimated the economy will expand 2.2 percent in 2011 and 2.3 percent in 2012, lower than the government’s forecast of 2.8 percent and 2.9 percent respectively.

Bulgarians have cut consumer spending and increased savings to shield against unemployment, which is forecast to reach 12.2 percent this year, the highest in at least 3 years, according to the EU. Personal and household deposits rose 4.2 percent in the third quarter, the central bank said.

Growth in the euro region slowed to 0.2 percent in the second quarter from 0.8 percent in the first three months of 2011 as governments cut spending to rein in budget deficits. Germany’s economy, the region’s largest, almost ground to a halt.

--With assistance from {Zoya Shilova} in Moscow. Editors: Alan Crosby, Douglas Lytle

To contact the reporter on this story: {Elizabeth Konstantinova} in Sofia at ekonstantino@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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