Bulgaria: 2022 Article IV Consultation - Press Release; and Staff Report for Bulgaria

IMF Staff Country Reports, June 24, 2022

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Canonical URL: Bulgaria: 2022 Article IV Consultation - Press Release; and Staff Report for Bulgaria

The economy showed resilience through the pandemic, but the war in Ukraine has clouded the outlook, heightened uncertainty, and increased downside risks.
With policy support, growth rebounded in 2021 despite the lingering COVID-19 crisis and protracted political uncertainty that hampered investment.
Inflation accelerated significantly, pushed by global factors and strong domestic consumption.
GDP growth is projected to slow below 3 percent and average inflation to exceed 12 percent in 2022.
Policies must navigate difficult trade-offs to support activity, meet needs from the war, and contain inflation, while raising living standards, reducing inequalities, and supporting the green transition.

2021: Growth rebounded despite COVID-19 and political uncertainty that hampered investment.
Inflation dynamics: Accelerated significantly due to global factors and strong domestic consumption.
War in Ukraine: Introduced heightened uncertainty and increased downside risks to the outlook.

GDP growth: Projected to slow below 3 percent in 2022.
Inflation: Average inflation projected to exceed 12 percent in 2022.
Risks: Increased downside risks stemming from the war in Ukraine and elevated uncertainty affecting investment and activity.

Trade-offs: Policies need to balance supporting activity, meeting needs arising from the war, and containing inflation.
Social and structural goals: Policy mix should also aim to raise living standards, reduce inequalities, and support the green transition.
Implicit guidance: Maintain policy support where needed while addressing inflationary pressures and pandemic- and war-related needs.

International Monetary Fund. "Bulgaria: 2022 Article IV Consultation - Press Release; and Staff Report for Bulgaria."