EXECUTIVE SUMMARY 4 MACROECONOMIC OVERVIEW 5 Bulgarian finance minister does not expect serious direct impact of Brexit 5 Bulgaria's long-term convergence interest rate rises to 2.4% in June 5 REAL SECTOR 6 1. Inflation 6 Bulgaria’s CPI deflation eases to 1.3% y/y in June 6 Bulgaria’s annual PPI deflation deepens to 4.5% in May 7 2. Industry and Trade 7 Bulgaria’s business climate improves in June 7 Bulgarian parliament elects new members to antitrust regulator 8 Bulgaria’s industrial production drops 3.3% y/y in May 8 Bulgaria’s construction output decline eases to 8.1% y/y in May 9 Bulgaria's retail sales growth decelerates to 3.9% y/y in May 10 3. Labour Market 11 Bulgaria's unemployment rate drops to 8.4% in June, labour agency data show 11 Bulgaria’s labour cost growth accelerates to 7.7% y/y in Q1 11 4. Tourism 11 Bulgaria’s accommodation revenue rises 18.7% y/y in May 11 Foreign tourists in Bulgaria up 11.8% y/y in May 12 FISCAL SECTOR 12 Bulgaria reports budget surplus of 3.5% of GDP in H1 12 Bulgaria’s NEK to pay €550mn for cancelled Belene nuclear project, arbitration court rules 13 Bulgaria’s fiscal reserve rises 9.1% in May 14 Bulgaria’s government debt rises 8.6% y/y at end-May 15 FINANCIAL INTERMEDIATION 16 Bulgarian banking sector profit rises 12.3% y/y in January-May 16 Fitch affirms Raiffeisenbank (Bulgaria), FIBank, upgrades UBB 16 IMF, World Bank launch preliminary mission in Bulgaria over new FSAP 17 Bulgaria’s M3 growth speeds up, contraction of non-government loans eases in May 18 Bulgaria’s deposit, lending interest rates mostly down m/m in May 18 Bulgarian parliament to elect new chairperson of financial regulator by end-July 19 EXTERNAL SECTOR 20 Bulgaria reports current account surplus of 0.6% of GDP in January-May 20 FDI in Bulgaria drops 34.4% y/y in January-May 20 Bulgaria’s foreign trade deficit narrows 54% y/y in January-May 21 Bulgaria’s gross external debt drops 8.7% y/y at end-April 22 Bulgaria's foreign reserves rise 3.2% in June 22 POLITICS 23 Bulgarian PM Borissov considers cabinet reshuffle 23 Study shows 22.2% of Bulgarians involved in corruption in last year 24 Bulgarian parliament adopts anti-corruption bill in first reading 24 German President Gauck visits Bulgaria, calls for rule of law, tackling corruption 25 Bulgaria’s ruling GERB party leads in opinion poll 25
Bulgaria Country Report - June, 2016
This report covers the key macroeconomic, financial and political releases for Bulgaria for the period since June 16, 2016.
Finance Minister Vladislav Goranov said that he does not expect Brexit to have serious direct impact on Bulgaria.
Bulgaria's business confidence improved m/m for a second consecutive month in June. The industrial production fell 3.3% y/y in May, reversing a 2.6% y/y increase in April. Bulgaria's construction output fell 8.1% y/y in May, after decreasing by 10.5% y/y the month before. Retail sales (at constant prices) climbed 3.9% y/y in May, slowing down from a 5.4% y/y increase in April.
An arbitration court in Geneva has ruled that Bulgaria’s state-owned National Electricity Company (NEK) has to pay €550mn to Russia’s Atomstroyexport, a unit of Rosatom, for equipment already produced for the cancelled Belene nuclear power plant project.
The Bulgarian parliament has adopted a new draft anti-corruption law in its first reading.
Key points: The CPI decreased by 1.3% y/y in June, after dropping by 2% y/y in May Bulgaria reported a consolidated budget surplus of BGN3.09bn (€1.58bn) in the first half of 2016, equal to some 3.5% of projected GDP, preliminary data from the finance ministry showed The country reported a current account surplus of €274.8mn in the first five months of 2016, reversing a deficit of €192.1mn in January-May 2015