"Bulgaria Business Forecast Report Q4 2012" Now Available At Fast Market Research

Recently published research from Business Monitor International, "Bulgaria Business Forecast Report Q4 2012", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 19 October 2012

We expect Bulgaria's economic growth to be weighed down by significantly weaker aggregate demand in the eurozone and persistent concerns over the eurozone debt crisis.

We believe that the slowdown in external demand will weigh on Bulgarian exports, which, when combined with only moderate growth in household spending, will feed through to lower real GDP growth in 2012. Politically, we expect 2012 to be a difficult year for the ruling party GERB.

Core Views

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/451158_bulgaria_business_forecast_report_q4_2012.aspx) (http://www.fastmr.com/prod/451158_bulgaria_business_forecast_report_q4_2012.aspx)

A combination of high public dissatisfaction with the government's seeming lack of progress in the fight against corruption and failure to gain entry to the Schengen visa-free travel zone, combined with a weaker economic growth outlook will likely pose challenges to the government.

That said, with the opposition unorganised and weak, we do not expect the government to lose its mandate in 2012. We forecast the fiscal deficit to narrow to 2.0% of GDP in 2012, from an estimated 2.1% of GDP in 2011 as we expect Bulgaria's government to continue with its fiscally prudent consolidation efforts.

Restrained public spending will work to bring the deficit down, however, further increases in revenue intake will likely become hard to come by. There remains the risk for an expansion of government spending in the event that growth slows more precipitously than we currently forecast. Major Forecast Changes Significantly weaker external demand for Bulgaria's exports and a domestic banking sector highly exposed to the eurozone sovereign debt crisis will continue to weigh on the country's economic outlook in the coming years. We have revised down our Bulgarian real GDP growth forecast for 2012 and 2013 to 0.6% and 1.9%, from 1.1% and 2.3% respectively.

The Bulgarian government will struggle to meet its 2012 budget deficit target of 1.3% of GDP, and we instead forecast a deficit of 2.0%. That said, the government's commitment to fiscal prudence is set to remain in place over the coming years and we believe investor sentiment towards Bulgaria's sovereign debt is likely to keep the country's borrowing costs in check in the years ahead.

Bulgaria's current account balance is set to flip back into deficit in 2012, as weaker external demand and elevated global energy prices take their toll on the country's trade deficit. While we do not expect a negative shock to balance of payment stability in the near term as Bulgaria has ample foreign currency reserves, our forecast for an average current account deficit of 2.5% of GDP to 2021 combined with our expectation for weak financial flows in the years to come could pose risks to longer-term external account stability.

Higher global energy prices are set to modestly push-up consumer price inflation (HICP) in Bulgaria, and we have revised-up our end- 2012 price growth forecast to 2.2% y-o-y, from 1.8% previously.

Despite the country effectively importing its monetary policy from the European Central Bank (ECB), we do not expect looser monetary policy to translate to significa

Fast Market Research (http://www.fastmr.com) is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.