IMF Outlook: Bulgarian Economy to Grow 3% in 2011
2011-04-12 12:48:38
Bulgaria's economy will grow 3% in 2011, according to the biennial World Economic Outlook report released by the International Monetary Fund Monday.
Thus, the IMF forecast for the Bulgarian economy in 2011 is below the 3.6% growth projected by the Bulgarian government in its 2011 budget.
The Fund has actually upgraded its 2011 economic growth project for Bulgaria, which used to be at 2.6%. IMF data also shows that in 2010 the Bulgarian economy grew by 0.2%.
The IMF expectations for the Bulgarian economy in 2012 are also lower than those of the Bulgarian Cabinet; the April 2011 World Economic Outlook predicts Bulgarian economic growth of 3.5%, while Bulgaria's current projection stands at 4.1% and was even higher a month ago.
Just recently, Bulgaria's Finance Ministry reduced its economic growth forecasts for 2012 and 2013 in light of the civil unrest in the Arab world and the aftermath of the devastating earthquake that hit Japan on March 11. Thus, the Cabinet in Sofia now expects Bulgaria's economy grow by 4.1% in 2012 instead of the original figure of 4.7%; in 2013, the growth is forecast to be 4% instead of the 4.9% previously expected.
According to the IMF, Bulgaria's consumer prices grew by 3% in 2010, and will grow by 4.8% in 2011, and by 3.7% in 2012. Bulgaria's unemployment, which stood at 10.3% in 2010, will drop to 8% in 2011, and to 6.7% in 2012, the Fund projects.
Economic recovery will be slower in some emerging European countries that registered internal unsustainable booms like Romania, the World Economic Outlook says. Experts of the institution estimate that after a 1.3% decline in 2010, Romania's economy will grow by 1.5% in 2011 and by 4.4% in 2012.
The best economic performance in the emerging Europe region will be registered by Turkey with a 4.6% growth in 2011 and a 4.5% growth in 2011 but it will be far from the 8.2% it had in 2010. Poland will maintain a similar level with last year's of 3.8% in 2011, with a moderate 3.6% in 2012.
Regarding unemployment, IMF estimates in Romania a 6.6% for 2011 and a 5.8% for 2012, the lowest unemployment rate in the region. Bulgaria and Poland will also register rates below 10% while the rest of the region will see their rates exceeding 10%. Serbia's economy is predicted to grow by 3% in 2011, and by 5% in 2012, after a growth of 1.8% in 2010.
After shrinking by 4.5% in 2010, the economy of Bulgarian neighbor Greece, which falls in the Advanced Europe category, is projected to decline by 3% in 2011, and to grow by 1.1% in 2012.
According to the IMF, the world economy is set to grow 4.4% in 2011, down slightly from 5% in 2010. Growth will accelerate slightly to 4.5% in 2012.
The economic recovery for Europe is described as "gradual and uneven."
"In Europe, the recovery is proceeding modestly. Overall, real activity in the region remains below its potential level and unemployment is still high. There is, however, substantial variation across economies. The degree of economic slack is larger in the periphery of the euro area than in the core, whereas the largest emerging market economies in the region are already operating at or above capacity. The recovery in Europe has been gaining traction, despite renewed fi nancial turbulence in peripheral countries of the euro area during the last quarter of 2010. Concerns about banking sector losses and fiscal sustainability led to widening sovereign spreads in these countries, in some cases reaching highs not seen since the launch of the Economic and Monetary Union. But the situation was contained by strong policy responses at both the national and the EU level," the Fund says.
"In many ways, the European Union and the euro area are at a crossroads. Popular support for the euro remains strong, considering the tensions created by sharing sovereign risk. But unless economies make a quantum leap toward a more integrated approach to fiscal policy and assume joint responsibility for financial stability, support for burden sharing may be much lower in future crises," the IMF World Outlook concludes as regards the state of the common European currency.