Bulgaria's 9-month current account surplus shrinks 66.4% y/y to €432mn

By bne IntelliNews November 17, 2014

Bulgaria’s current account surplus narrowed by 66.4% y/y to €432mn in January-September on weaker foreign demand that curbed exports, preliminary central bank data showed. The surplus equalled 1.1% of the full-year GDP projection, compared to 3.1% a year earlier.

The drop in exports to non-EU countries contributed to a widening of the merchandise trade deficit by 25.8% y/y to €2.1bn. In addition, the net current transfers surplus fell 33.1% y/y to €1.3bn due to the lower amount of government transfers, also contributing to the decrease in the C/A surplus.

On the other hand, the income derived from ownership of financial assets in Bulgaria by non-residents fell 11.6% y/y to €1.6bn in the first nine months of 2014, driving down the net income deficit by 21.2% y/y to €873.2mn. The services surplus inched up 0.8% y/y to €2.1bn as the growth in net transport revenue was almost completely matched by the drop in net revenue from other services.

The capital account surplus increased 66.3% y/y to €510.8mn in January-September, reflecting the improved rate of EU funds absorption. The financial account recorded a surplus of €919.4mn, compared to a deficit of €1.6bn a year ago, due to the surge in foreign ownership of local debt after the €1.5bn Eurobond the government issued in July.

Balance of payments, € mn Jan-Sept 2013 Jan-Sept 2014 Change y/y
Current account 1,285.5 431.9 -66.4%
 Trade balance -1,699.0 -2,138.1 25.8%
 Services balance 2,081.3 2,097.8 0.8%
 Income balance -1,107.9 -873.2 -21.2%
 Current transfers, net 2,011.2 1,345.4 -33.1%
Capital account 307.1 510.8 66.3%
Financial account -1,569.3 919.4 /
 FDI in Bulgaria 1,160.7 1,105.6 -4.8%
Reserve assets* 248.7 -985.5 /
*A negative sign indicates an increase in international reserves.  
Source: BNB      
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