Bulgaria's 11-month current account surplus shrinks 69% y/y

By bne IntelliNews January 19, 2015

Bulgaria’s current account surplus narrowed 69% y/y to €371.1mn in the first 11 months of 2014 largely because of the expanding foreign trade gap, preliminary central bank data showed. The surplus equalled 0.9% of the full-year GDP projection, compared to 2.9% a year earlier.

The drop in exports to non-EU countries, coupled with a small increase in total imports, contributed to a widening of the merchandise trade deficit by 20.3% y/y to €2.5bn. In addition, the net current transfers surplus contracted 32% y/y to €1.5bn.

On the other hand, the net income deficit shrank 7.4% y/y to €1.1bn, while the services surplus increased 10.1% y/y to €2.5bn due to a rise in net transport revenue that offset falling net tourism income and shrinking revenue from other services.

The capital account surplus increased 84.5% y/y to €821mn. Meanwhile, the financial account recorded a surplus of €1.4bn, compared to a deficit of €2bn a year ago, due to the surge in foreign ownership of local debt after the €1.5bn Eurobond the government issued in June.

Balance of payments, € bn Jan-Nov 2013 Jan-Nov 2014 Change y/y
Current account 1.2 0.4 -69.0%
  Trade balance -2.1 -2.5 20.3%
  Services balance 2.2 2.5 10.1%
  Income balance -1.2 -1.1 -7.4%
  Current transfers, net 2.3 1.5 -32.0%
Capital account 0.4 0.8 84.5%
Financial account -2.0 1.4 /
  FDI in Bulgaria 1.5 1.2 -20.8%
Reserve assets* 0.8 -1.5 /
*A negative sign indicates an increase in international reserves.  
Source: BNB      
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