In its spring report, the European Commission affirms its macroeconomic forecast of the growth rate of the Bulgarian economy for this and next year, while at the same time expecting domestic consumption to continue to be the main growth driver.

The new Commission report reads that the real GDP growth remained robust in 2016 at 3.4 percent, driven by buoyant net exports and private consumption. In contrast, investment growth was significantly negative at -4 percent in 2016, mainly due to a low absorption of EU funds.

In 2017, real GDP growth is projected to reach 2.9 percent, as in the winter forecast, and then slightly taper off to 2.8 percent in 2018, affirming the winter forecast. Domestic demand is expected to be the main growth engine, driven in particular by private consumption and investment following the acceleration in EU funds absorption under the 2014-2020 EU programming period.

Risks to the growth outlook are broadly balanced, the report reads. As a domestic downside risk, a significantly slower than expected implementation of EU funds could dent investment and growth. Given the openness of the economy, weaker import demand from the main trading partners, especially in Europe, and surging oil prices would pose external downside risks. On the upside, stronger-than expected consumer confidence and faster progress with reforms could lift real growth rates, the European Commission spring forecast indicates.