European countries are not necessarily done for the decade of disappointing economic growth, although it will be very low in the next few years. This predicted in an interview for BNR the director of the World Bank for low union Galina Vincelet.
The World Bank’s forecast for global economic growth is from 5.7% in 2021 to fall below 3% this year, which is the sharpest drop in the global economy in more than 80 years, Galina Vincelet explains. Global inflation also accelerated to peaks it said were “not seen for several decades”. Experts expect a slight contraction of the EU economy next year.
The forecast for Bulgaria is for economic growth below 2% for 2023.
The World Bank is an unwavering supporter of Ukraine, Vincelet points out. The amount mobilized so far in support of the country is about 17.8 billion dollars, of which nearly 11.4 billion have already been paid.
Experts have estimated the damage caused in Ukraine – from February 24, when Russia invaded the territory, to June 1, the amount reaches nearly 350 billion dollars and breaks. The economic effect of Russian military aggression will continue to weigh on the global economy in the next few years, and will be felt in Bulgaria as well.
The team led by Galina Vincelet has developed models to calculate real economic progress for four countries – Bulgaria, Croatia, Poland and Romania – from the implementation of the reforms enshrined in their recovery and recovery plans.
The resources under the recovery plans will undoubtedly play an important role in boosting the growth of these economies, emphasizes Vincelet. If it carries out all the pending reforms successfully, Bulgaria can double the growth of its economy, she points out.
“In the long term, until 2030, Bulgaria’s growth potential can reach 4.6% on average per year, the current potential of the country, which is about 2.3% per year, this is a doubling.”
The World Bank has identified four structural areas affecting demographic trends and their negative consequences, education, the labor market and the institutional sphere, as well as the green transition and digitalization, explains Galina Vincelet.
“In terms of aging, efforts and measures will be required to bring many of the currently inactive population into the labor market, especially in the economically weaker regions of the countries. This is valid for Bulgaria, but it is also valid for Croatia and Romania. Bulgaria, Poland, Romania can also do a lot of damage to reduce the number of young people between 20 and 34 who are helping themselves to neither study nor work.”
There are many arguments in support of the introduction of the euro, commented Galina Vincelet in the program “Saturday 150”. According to her, the benefits of this for the Bulgarian economy are indisputable.
“The euro is the reserve currency in Bulgaria, on which the stability of the lev, the currency board and our entire monetary regime is strengthened.”