ECONOMY

Bulgaria’s GDP growth slows down to 4.3 percent in 2003

SOFIA – Bulgaria’s economic growth slowed to 4.3 percent last year but the government and analysts said the rise in the country’s gross domestic product (GDP) was still one of the highest in Europe and would grow even faster this year. The European Union aspirant’s 2003 growth, announced by the statistics office yesterday, was below a robust 4.9 percent rise in 2002 and an initial government target of 5.0 percent. Analysts said the slight slowdown was not alarming because Bulgaria had been establishing a track record of consistent growth and had left behind the economic instability which accompanied its transition from communism to market economy. «It is still a fairly healthy growth rate. A moment of hope is that as the European economy continues to gather strength, Bulgaria would grow at a faster pace in 2004,» said Andrew Roberts, emerging market analyst at Schroder Salomon Smith Barney in London. Finance Minister Milen Velchev told reporters he was still pleased with last year’s growth, and that the government’s target of a 2004 rise of above 5.0 percent was achievable. «We are yet to analyze the reasons that led to a lower (2003) growth,» Velchev said. «But that growth of above 4.0 percent should not be underestimated as it is still one of the highest in Europe.» Analysts said economic reforms launched more than a decade ago and aimed at preparing Bulgaria for EU entry in 2007 had begun to pay off and the country’s GDP grew by over 4.0 percent annually in the last four years. NSI’s data showed that last year’s slowdown was mainly due to a 1.3 percent decline in the agriculture sector, where bad weather damaged crops. Farming accounted for 10 percent of Bulgaria’s GDP last year. A sharp jump in banking credits last year boosted imports by 14.8 percent from a year earlier, outpacing export growth of 8.0 percent and driving Bulgaria’s trade deficit up to 3.356 billion levs ($2.1 billion), the data showed. The Bulgarian economy is poised to keep on expanding this year and attract further investments due to its low production costs and well-educated and cheap labor force, analysts said. «We expect this year’s growth to reach 4.5-4.8 percent… and to be driven by sustained investment in production and services, and rising exports,» said Peter Botoucharov, head of emerging markets strategy at Commerzbank Securities in London. Roberts said he expected a 4.6 percent rise in GDP this year, which would depend on the economic recovery in the EU and the euro’s fluctuations as over half of Bulgaria’s exports are destined to western Europe.