Key developments and challenges

Growth remains limited but fiscal discipline has been strong. As a result of its strong fiscal performance, Bulgaria was removed from the European Commission’s excessive deficit procedure, but economic growth remains low in a difficult global environment.

The energy sector has seen mixed reform signals. The government has responded to outside pressures by stepping up efforts to liberalise the electricity market, but revisions to the access charges for renewable generation may deter investment in the sector.

Banking sector stability has been maintained notwithstanding the relatively high share of Greek banks. This has been achieved largely through strong local supervision.