After contracting by 4.2% in 2020, GDP is projected to rebound by 3.8% in 2021 and 4.4% in 2022. GDP will return to its pre‑pandemic level at the end of 2021. The reopening of the economy will create renewed strength in household demand and business investment, which will replace government spending as the main engine of growth. The economic recovery will be reflected in gradual improvements in the labour market.
The immediate policy priority is to speed up vaccination, the slowest among EU countries. This will allow restrictions to be reduced and is a prerequisite for the economy to operate at normal levels again. Strong fiscal support should continue in 2021 and then be eased gradually in the following years. Bulgaria expects to receive large EU funds, which, if planned and implemented effectively, would accelerate the recovery and promote investment and productivity.