The growth of Bulgaria's gross domestic product (GDP) is expected to slow down to 2.1 percent in 2016 against an almost 3 percent increase last year, the Bulgarian National Bank (BNB) said Tuesday.

"A specific factor for 2016 contributing to the economic growth slowdown will be lower year-on-year government investment," BNB said in a forecast.

The projected private investment growth in 2016 would not be sufficient to compensate for the lower volume of government investment and will therefore lead to a decline in gross fixed capital formation in real terms, the band added.

In 2017, this effect is likely to fade away, total investment to increase due to both continuing growth in private investment and increased government investment, and GDP would grow by 2.8 percent year-on-year, the BNB said.

Meanwhile, in 2016 and 2017 the positive contribution of net exports to GDP growth is expected to gradually contract compared with its relatively high level in 2015, the report said.

Real export growth in 2016 is anticipated to slow down compared with the previous year before it starts to accelerate consistent with the dynamics of external demand for Bulgarian goods and services, BNB said.

Imports of goods and services are also expected to slow down in 2016 and recover its rate of real growth in 2017 along with gradually accelerating domestic demand. Endit

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