Bulgaria's gross domestic product (GDP) increased by between 0.5 per cent and one per cent in the first quarter of 2011, according to estimates of the Centre for Economic Development (CED).

The improvement in the country's economy will accelerate in the second quarter of 2011, bringing the annual growth rate to at least 2.5 per cent this year, analysts said.

The rate is not forecast to exceed three per cent in 2011, despite Government projections for a GDP increase of 3.6 per cent.

CED's report is based on official statistics data, which showed that the country registered a 5.5 per cent contraction in GDP in 2009, the first crisis year for Bulgaria's economy. The crisis took its toll in the last quarter of 2009, prompting a 7.6 per cent decline in GDP on an annual basis. 2010 marked the exit from the downturn, which was, however, weak and unstable, leading to an annual drop in GDP of 0.2 per cent.

Construction was the industry hardest hit by the crisis, while manufacturing was the most flexible sector to cope with the turmoil. The finance, credit and insurance segment, as well as real estate and business services, were the only industries to escape the crisis, according to the report.