European Commission (EC) presented its autumn economic forecast for 2024. According to the EC, after a prolonged period of stagnation, the economy of the European Union (EU) is returning to moderate growth. At the same time, the rate of inflation reduction remains stable, as quoted by News.bg.
Economic activity is expected to grow by 1.5% in the EU and by 1.3% in the Eurozone in 2025, reaching 1.8% in the EU and 1.6% in the Eurozone in 2026. For Bulgaria, the forecasts forecast gross domestic product (GDP) growth from 2.4% in 2024 to 2.9% in 2025 and 3% in 2026.
According to the analysis, inflation in the EU will decrease significantly – from 6.4% in 2023 to 2.6% in 2024, and then it will decrease to 2.4% in 2025 and 2% in 2026. A sharp drop in inflation is reported for Bulgaria &ndash ; from 8.6% in 2023 to 2.5% in 2024, with forecasts pointing to a decline to 2.3% in 2025.
Investments financed through the Recovery and Resilience Facility are expected to support an increase in gross fixed capital formation.
The EU fiscal deficit is projected to reach 2.6% of GDP in 2024 and 2.8% in 2025 and 2026, mainly due to increased spending on public sector pensions and wages. Public debt will also increase, with Bulgaria forecast to reach 24.5% of GDP by 2026.
The EU labor market is stable, with unemployment remaining at a record low. Employment growth will continue, albeit at a slower pace. Unemployment is expected to remain at 6.1% in 2024, before falling to 5.9% in 2025 and 2026.