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    Raiffeisenbank: Industry and exports no longer bring economic growth, a minor GDP decline will most probably be registered in Q1 2012


    Raiffeisenbank (Bulgaria) EAD published its monthly review of the macroeconomic data available as of the end of March 2012. According to the bank’s analysts the short-term indicators confirm the negative trends in the Bulgarian economy, which emerged in late 2011. The decline in industrial production accelerated in January to 3.1% yoy, while the domestic trade turnover contracted by 3.3% compared to January 2011. Exports of goods fell in nominal terms by 10.2% over the same period of the previous year.
    In February the monthly inflation rate accelerated to 0.9% due to rising food and fuel prices after the crude oil price, expressed in EUR, reached a historical maximum. The state of the labour market also deteriorated – after the reported unemployment rate of 11.4% in the last quarter of 2011, in January and February 2012 unemployment rose sharply and reached 13.5%. Loans to both companies and households marked declines in February – respectively by BGN 118.8 mn (0.4%) and BGN 45.5 mn (0.2%) compared to January. The country’s trade deficit widened and thus the current account balance worsened, posting a deficit of EUR 112 mn in January.

    ‘The developments in the recent months show that industry and exports are no longer drivers of economic recovery, unlike in 2010 and 2011,’ said Kaloyan Ganev, Chief Economist of Raiffeisenbank (Bulgaria). ‘Because of the negative dynamics that we see in the short-term statistics, probably in the first quarter a slight decrease in gross domestic product will be reported. However, for the time being we maintain our forecast of around 1% economic growth for 2012.


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