Investments in the Bulgarian economy will increase by 6% to 8% a year in the post-crisis period, according to an analysis of UniCredit Bulbank. However, the growth rate will be reduced almost by half, compared to the fluctuating high levels of between 15% and 20% in the boom years. The bank’s expectations for individual consumption are for an annual increase in the range of 3%-3.5%, compared to 6%-7% prior to the crisis. “The recovery of private consumption and investment to their highest levels recorded in 2008 will take time,” said Kristofor Pavlov, Chief Economist of UniCredit Bulbank. According to him, reaching pre-crisis levels is expected in the second half of 2013, considering that in Q1 2011, private consumption was still some 8% lower, compared to Q3 2008.
Foreign direct investments are expected to stabilise at around 4% to 5% of GDP. Similarly, the forecast for the inflow of foreign deposits is for these to decrease from about 20% of GDP to 8%-10% in 2013-2020. The support of national savings will be necessary in order to compensate for the reduced inflow of foreign deposits. “Such an opportunity can be created with cash incentives paid by public finances to people saving in additional voluntary pension schemes, analogous to the measures discussed in the Czech Republic and Poland,” commented Pavlov.
Text: www.klassa.bg
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