EXECUTIVE SUMMARY 4 MACROECONOMIC OVERVIEW 5 Bulgaria makes some progress on country-specific recommendations, EC says 5 Bulgaria’s average per capita income up 2.9% y/y, expenditure down 0.7% y/y in Q4 5 Bulgaria's long-term convergence interest rate rises to 2.67% in February 6 REAL SECTOR 6 1. GDP 6 Bulgaria’s GDP growth speeds up to 3% in 2015 6 2. Inflation 7 Bulgaria reports CPI deflation of 0.5% y/y in February 7 Bulgaria’s annual PPI deflation softens to 2.9% in January 8 Bulgaria's agricultural producer prices rise 9.8% y/y in Q4 9 3. Industry and Trade 9 Bulgaria’s business climate improves in February 9 Bulgaria’s industrial production growth slows to 3% y/y in January 10 Bulgaria's construction output drops 10.7% y/y in January 10 Bulgaria's retail sales growth decelerates to 1.3% y/y in January 11 4. Labour Market 12 Bulgaria's unemployment rate drops to 10% in February, labour agency 12 Bulgaria’s 2015 labour productivity data mixed 12 5. Tourism 12 Bulgaria’s accommodation revenue rises 9% y/y in January 12 Foreign tourists in Bulgaria up 18.3% y/y in January 13 FISCAL SECTOR 13 Bulgaria reports budget surplus of 1.1% of GDP in January-February 13 Bulgaria’s fiscal reserve rises 17% in January 14 Bulgaria issues two Eurobond tranches worth €1.994bn 15 Bulgaria’s government debt rises 9.1% y/y at end-January 15 FINANCIAL INTERMEDIATION 16 Bulgarian banking sector profit down 29% y/y in January 16 Bulgarian unit of Greece’s Eurobank concludes acquisition of Alpha Bank branch 16 Bulgaria’s M3 growth slows, domestic credit turns to annual decline in January 17 Bulgaria’s deposit, lending interest rates mixed in January 18 Assets of Bulgarian resident investment funds drop 1% to €406.2mn at end-2015 18 EXTERNAL SECTOR 19 Bulgaria’s current account surplus widens 9.4% in 2015 19 FDI in Bulgaria rises 22.5% in 2015 20 Bulgaria turns to foreign trade surplus in January 20 Bulgaria’s gross external debt drops 13.2% in 2015 21 Bulgaria's foreign reserves rise 0.9% in February 22 POLITICS 23 EU’s Juncker hints at separating Bulgaria, Romania under CVM process 23 Bulgaria’s ruling GERB party leads in opinion poll 23
This report covers the key macroeconomic, financial and political releases for Bulgaria for the period since February 16, 2016.
Bulgaria’s GDP increased by a real 3% in 2015, accelerating from a 1.6% rise in 2014. The 2015 reading is the highest growth since 2008.
On March 8, the European Commission adopted a Communication, in which it found that the country is experiencing excessive macroeconomic imbalances.
Bulgaria's business confidence strengthened m/m for a second consecutive month in February, with the total business climate indicator increasing 0.5 points, after a 0.6 point rise in January. The industrial production growth decelerated to 3% y/y in January from 3.5% y/y in December. The construction output went down 10.7% y/y in January, following a 2.1% y/y decline the month before. Retail sales (at constant prices) increased by 1.3% y/y in January, decelerating from a 1.7% y/y rise in December.
The CPI decreased by 0.5% y/y in February, after being flat y/y in January
Bulgaria reported a consolidated budget surplus of BGN961mn (€491.4mn) in January and February, equal to some 1.1% of projected GDP, preliminary data from the finance ministry showed
Bulgaria issued on March 14 two Eurobond tranches worth a combined €1.994bn
The current account surplus increased by 9.4% to €541.6mn in 2015