Fiscal Council: Lower Consumption and Higher Inflation Expected by Year-End

The Fiscal Council has projected a contraction in consumption and an increase in inflation by the end of the year, publishing three scenarios for the development of the Bulgarian economy — realistic, pessimistic, and strongly pessimistic.

Under the realistic scenario — described as rather optimistic — the conflict in the Middle East is assumed to end by the end of June. In this case, Bulgaria’s economic growth would reach 2.5%, while harmonised annual inflation would stand at 4.2%.

Under the pessimistic scenario, the conflict is assumed to continue beyond July, while under the strongly pessimistic scenario, supplies through the Strait of Hormuz are expected to fall by 60%.

In that case, economic growth would slow to 0.5%, while inflation would rise to 5%.

• One in five Bulgarians lives below the poverty line