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SOFIA, Oct 5 (Reuters) - Bulgaria has cut its 2018 economic growth forecast to 3.6 percent from 3.9 percent, mainly due to an economic slowdown in Europe, where most of the Balkan country’s exports go, the finance ministry said on Friday.
In its autumn macroeconomic forecast, the ministry said it expected domestic demand, public spending and investment to lift economic growth to 3.7 percent next year.
“Despite favourable developments concerning consumption and investments, the downward dynamics of exports led to slower economic growth in the first half of the year and a revision of expectations for 2018,” the ministry said.
The economy expanded by an annual 3.4 percent in the first six months, after growing by 3.8 percent in 2017.
The macroeconomic forecast on which the ministry will draft its 2019 budget sees EU harmonised prices rising 2.7 percent this year and 3.0 percent in 2019, mainly due to high global oil prices.
The ministry is yet to present its 2019 budget draft, but has already said it plans to increase all public salaries by 10 percent in the hopes that this will push the private sector to increase pay and boost low living standards in the country. (Reporting by Tsvetelia Tsolova; Editing by Angel Krasimirov and John Stonestreet and Jan Harvey)