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 transfers, net||2,011.2||1,345.4||-33.1%|
|FDI in Bulgaria||1,160.7||1,105.6||-4.8%|
|*A negative sign indicates an increase in international reserves.|
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