WASHINGTON, 8 April 2020 – After better-than-expected GDP growth in 2019, Bulgaria’s economy, in line with other EU countries, is set to plunge into a recession in 2020, due to the toll the COVID-19 pandemic is taking on export and domestic activity. GDP is expected to decline by 3.7 percent in 2020, according to World Bank’s Spring 2020 Economic Update for Europe and Central Asia.
In addition to providing a regional forecast, the Economic Update calls for decisive policy measures that prioritize investments in health care systems and provide safety nets for people, especially the most vulnerable, in order to mitigate the impacts of the COVID-19 (Coronavirus) pandemic in Europe and Central Asia.
Projections of the economic implications of COVID-19 are subject to significant uncertainty. The simulation exercises illustrate the range of growth outcomes that may materialize as a result of the pandemic. *Scenarios suggest regional growth will fall into a recession in 2020, contracting to between −4.4 and −2.8 percent, held back by the coronavirus pandemic, before rebounding in 2021 as policy measures are introduced, global commodity prices gradually recover, and trade strengthens. The 2021 forecast for Bulgaria’s GDP growth is to reach 3.9%.
“During these exceptionally difficult times, it is imperative for policymakers to act decisively,” says Cyril Muller, World Bank Vice President for Europe and Central Asia. “This means moving rapidly to strengthen health systems and social safety nets, supporting the private sector, and preserving financial stability and confidence — all critical to people’s lives.”
According to Fabrizio Zarcone, the World Bank’s Country Manager for Bulgaria, the Czech Republic and Slovakia, “Now more than ever, a special focus on the poor is needed, as they are more vulnerable to health shocks and they are more likely to suffer from income losses as a result of quarantines and disruption of economic activity.”
The report calls for supportive measures such as cash transfers or healthcare subsidies, to help vulnerable people and families, and temporary business credit, and tax breaks to businesses to cushion the downturn and preserve jobs.
The World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs. It is deploying up to $160 billion in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery.
*The scenarios in the report are based on data as of March 20, 2020.