In Bulgaria we focus on:
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supporting the competitiveness of Bulgarian companies by helping to improve their governance, enhance value chains, promote the knowledge economy and assist in adaptation to demographic challenges
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financing infrastructure projects that enhance regional connectivity, provide green solutions to urban challenges for municipalities, promote decarbonisation and resource efficiency, and
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strengthening the resilience of financial intermediation.
As well as being a country where the EBRD works, Belarus is also a donor. In 2018 Bulgaria provided €115 million of European Structure and Investment Funds to support water projects across the country.
The EBRD’s latest strategy for Bulgaria was adopted on 15 January 2020.
Bulgaria's policy response to the coronavirus crisis
The EBRD is monitoring Bulgaria's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.
EBRD forecast for Bulgaria’s real GDP growth in 2020 -5.5%
EBRD forecast for Bulgaria's real GDP growth in 2021 3.0%
Following growth of 3.4 per cent in 2019, which was driven mainly by private consumption, the country is experiencing a deep recession in 2020. The state of emergency, declared in mid-March, imposed tough restrictions on travel and resulted in a sharp decrease of economic activity in March and April. Economic activity started to gradually recover from May onwards amid the lifting of most restrictions. However, the recovery slowed and numbers of people testing positive for Covid-19 rose in mid summer. The full impact of the crisis was seen in the second quarter, when real GDP dropped by 8.7 per cent year-on-year. Private consumption decreased by 2.4 per cent year-on-year in the first half of 2020, while investments fell by more than 8 per cent year-on-year.
Exports of goods, totalling about 50 per cent of GDP and making Bulgaria only moderately dependent on trade, decreased by about 3 per cent year-on-year in the first half of 2020. Foreign arrivals stopped almost completely in April and May 2020 and have been slow to recover since then, declining by 75 per cent year-on-year in June and 65 per cent in July. The government crisis response package of about 5 per cent of GDP has focused on preserving jobs, helping vulnerable groups and providing liquidity support to firms.
In July 2020, Bulgaria has joined the EU’s Exchange Rate Mechanism (ERM II) and the Banking Union, paving the way for euro adoption. GDP is expected to fall by 5.5 per cent in 2020 and bounce back with a 3 per cent growth rate in 2021, assuming gradual normalisation of economic activity in Bulgaria and its main economic partners from late 2020. The main risks to the outlook are on the downside and are associated with a possible prolonged Covid-19 crisis, both in Bulgaria and elsewhere.
