Bulgaria's economy shrank by a real 4.7 per cent year-on-year in the first nine months of the year and 5.4 per cent year-on-year in the third quarter, less than officially estimated earlier, the country's National Statistics Institute (NSI) said on December 10.

In absolute terms, three-quarter gross domestic product (GDP) was 48.33 billion leva and third-quarter GDP was 18.06 billion leva. NSI earlier estimated that the economy would shrink by 5.8 per cent in the third quarter.

In 2008, the Bulgarian economy grew by seven per cent through the first three quarters year, buoyed by the momentum accumulated during years of cheaply-available credit. The country officially entered a recession in the first quarter of 2009.

The biggest decline was posted by the industry, which shrank by 8.3 per cent year-on-year in the first nine months of the year. The agriculture sector shrank by 1.4 per cent and the services sector posted an annual decrease of 0.7 per cent in January-September, NSI said in a statement.

Consumption, which was one of the main drivers of economic growth in recent years, was down an annual 4.6 per cent for the nine months. Investment was down 13.2 per cent.

Exports shrank by 12.8 per cent year-on-year in the first half, while imports were down by an annual 23 per cent. Nevertheless, Bulgaria still had a trade gap of 3.65 billion leva for the period, the equivalent of 7.6 per cent of GDP. For the quarter, Bulgaria posted a 700 million leva surplus.

Bulgaria's economy was expected to shrink by 4.9 per cent for the full year, Finance Minister Simeon Dyankov said on December 9, revising the Cabinet's six per cent forecast made in the summer.

Dyankov said some sectors have resumed growth in the last months of the year, including the textile and chemical industries, crediting it to measures that the Government had taken against the shadow economy.