EXECUTIVE SUMMARY 4 MACROECONOMIC OVERVIEW 5 Bulgaria drops to 38th position in ease of doing business ranking 5 Bulgaria’s consumer confidence flattens at close to 8-year high 5 REAL SECTOR 6 1. GDP 6 Bulgaria’s Q3 GDP growth speeds to 2.9% y/y, Q1 and Q2 data revised up substantially 6 EC raises Bulgaria’s 2015, 2016 growth forecasts 6 EBRD improves Bulgaria’s 2015, 2016 growth outlook 7 2. Inflation 8 Bulgaria returns to deflation in October on lower food, power costs 8 Bulgaria’s annual PPI deflation deepens to 2.1% in September 9 Bulgaria's agricultural producer prices rise 6.4% y/y in Q3 9 3. Industry and Trade 10 Bulgaria’s business climate improves in October 10 Bulgaria’s industrial output growth brakes to 0.6% y/y in September 11 Bulgaria’s construction output declines 2.7% y/y in September 11 Bulgaria's building permits, construction starts rise y/y in Q3 12 Bulgaria's retail sales contraction deepens in September 12 4. Labour Market 13 Bulgaria's unemployment rate falls to 9.2% in September – labour agency 13 Bulgarian real gross wage growth slows to 7.8% y/y in September 13 5. Tourism 14 Bulgaria’s accommodation revenue rises 10.8% y/y in September 14 Foreign tourists to Bulgaria down 4.1% y/y in September 14 FISCAL SECTOR 15 Bulgaria’s budget surplus melts in October 15 Bulgaria raises 2015 budget gap target to 3.3% of GDP 16 Revised data more than doubles Bulgaria’s 2014 budget gap 16 Bulgarian government sets 2016 budget deficit target at 2% of GDP 17 Bulgaria’s fiscal reserve shrinks 9.1% in September 17 IMF urges Bulgaria to contain spending, cut debt 18 Bulgaria to auction €36mn of 10-year T-bonds on November 16 18 Bulgaria raises below-target €25mn at 5-year T-bond auction as yields climb further 19 Bulgaria sells €77mn of 3-year T-notes, yield falls 19 Bulgaria raises below-target €25mn at 10-year T-bond auction as yields stay uncomfortably high 19 Bulgaria’s government debt to GDP ratio rises 8.1pp y/y in Q2, highest gain in EU 20 Bulgaria’s government debt growth slows to 22.4% y/y in September 20 FINANCIAL INTERMEDIATION 21 Bulgarian banking sector profit rises 30% y/y in January-September 21 Oliver Wyman appeals tender for review of Bulgarian banking system's asset quality 21 Bulgaria’s central bank under pressure as official report claims it knew Corpbank was close to collapse 22 Bulgaria’s M3 growth slows in September, domestic credit contraction moderates 25 Bulgaria’s deposit, lending interest rates mixed in September 26 EXTERNAL SECTOR 27 Bulgaria’s current account surplus widens 24% y/y in January-August 27 FDI into Bulgaria drop 12% y/y in January-August 27 Bulgaria’s foreign trade deficit halves y/y in January-September 28 Bulgaria’s gross external debt drops 8.2% y/y in August 29 Bulgaria's FX reserves rise 0.8% in October 29 POLITICS 30 Bulgaria’s ruling GERB strengthens positions after local elections second tour 30
This report covers the key macroeconomic and financial releases for Bulgaria for the period since October 14, 2015.
Bulgaria’s real GDP growth quickened to 2.9% y/y in the third quarter from an upwardly revised 2.6% y/y in the previous three months, a seasonally-adjusted flash estimate from the National Statistics Institute (NSI) showed on November 13.
On November 5, the European Commission has improved its outlook of Bulgaria’s GDP growth to 1.7% for 2015 and 1.5% for 2016. Also on November 5, the European Bank for Reconstruction and Development (EBRD) has raised its forecasts of the country’s GDP growth to 1.8% in 2015 and 2% in 2016.
Bulgaria's combined business climate indicator increased by one point m/m in October, after falling by 2.9 points m/m in September. The industrial production growth decelerated sharply to 0.6% y/y in September from 4.3% y/y in August. The decline in the construction output widened to 2.7% y/y in September from 0.3% y/y the month before. The retail sales (at constant prices) fell further in September, with the decline deepening to 2.5% y/y from 1.9% y/y in August.
The Bulgarian cabinet has adopted the 2016 budget bill that envisages a deficit of 2% of GDP, down from 3.3% of GDP this year.
The CPI fell by 0.6% y/y in October, after edging up 0.1% y/y in September
Bulgaria's consolidated budget surplus was BGN57mn (€29mn) at end-October, equal to 0.1% of the projected 2015 GDP, the finance ministry said in a preliminary estimate
The current account surplus widened to €1.17bn in January-August from €948mn in the same period of 2014