Brussels, February 10 (BTA) - The European Commission (EC) presented here on Thursday its Winter 2022 Economic Forecast, according to which Bulgaria's economy is expected to grow by 3.7 per cent in 2022. Economic growth in this country is expected to accelerate to 3.9 per cent next year.

In its Autumn Economic Forecast, issued in November of 2021, the Commission had projected the Bulgarian economy will grow by 4.1 per cent in 2022 and then slow down to 3.5 per cent next year. The Bulgarian economy grew by 4 per cent in 2021, which exceeded the Commission's projection of 3.8 per cent from last November.

The EC projects inflation in Bulgaria to reach 6.3 per cent this year, after which it will slow down to 3.9 per cent in 2023. Consumer prices in Bulgaria have increased by 2.8 per cent in 2021, according to EC data.

The EC's projections for the EU economy are that following a notable expansion by 5.3per cent in 2021, the EU economy will grow by 4.0 per cent in 2022 and 2.8 per cent in 2023. Growth in the euro area is also expected at 4.0 per cent in 2022, moderating to 2.7 per cent in 2023. The EU as a whole reached its pre-pandemic level of GDP in the third quarter of 2021 and all Member States are projected to have passed this milestone by the end of 2022.

According to a report issued at the end of January, the Bulgarian central bank expects this country's real to mark a 3.7 per cent increase in 2021, followed by a 3.6 per cent increase this year and a 4.5 increase in 2023.

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The University of National and World Economy's Institute of Economics and Politics projects slower economic growth this year due to the exhaustion of the recovery effects and the double inflation rate, compared to what was initially projected by the Government. In its third annual report, submitted to BTA, the Institute projects that GDP growth in 2022 will be 3.5 per cent, which is much lower than the 4.8 per cent projected by the Government in the draft budget, which Parliament is reviewing.

The projected inflation for this year is 11.6 per cent, which is double what the Government expects. A slower recovery of the labour market is also projected by the Institute.

In addition to a more conservative assessment of the Bulgarian economy's prospects, the document also contains an expert analysis on the impact of Bulgaria joining the eurozone. According to the report, adopting the euro will lead to price increases as a result of the initial rounding up of prices and the currency board's replacement by conventional monetary policies. In addition to that, there is a risk of a lasting loosening of fiscal discipline, which is symptomatic for almost the whole eurozone, the authors of the analysis argue. /DS/