Bulgaria's current account gap narrows 25% y/y in Q1 2013

By bne IntelliNews May 17, 2013

Bulgaria's current account deficit narrowed 25% y/y to EUR 421mn in Q1 2013 on the back of strong exports, preliminary data released by the central bank showed.

The merchandise trade gap shrank 49% y/y to EUR 478mn in the first three months of the year as exports climbed 12.9% to EUR 5.2bn, while imports climbed only 2.4% to EUR 5.7bn.

The surplus of the services' balance fell 19% y/y to EUR 73mn but will most likely improve in the next quarter in light of the summer tourism season. In that context, revenue from foreign tourists edged up 6% y/y to EUR 317mn in Q1.

The deficit on the income balance contracted 33% y/y to EUR 211mn. Net current transfers posted a EUR 195mn surplus, down from EUR 602mn in Jan-Mar 2012, attributed to the lower remittances flow since the start of the year.

The financial account deteriorated substantially in Q1, netting a EUR 1bn deficit compared to a EUR 29mn surplus a year earlier. This can be associated with the falling net FDI (down 57% y/y) and the repayment of a Eurobond issue in January. In addition, the net portfolio investment deficit increased by 46%.

As a result, the balance of payments's gap widened to EUR 1bn in the first quarter of 2013 from just EUR 176mn a year earlier.

Bulgaria, BoP (EUR mn) 2012 Q1 2013 Q1 Change y/y
Current Account 562 421 -25%
Goods balance -942 -478 -49%
Services balance 90 73 -19%
Income balance -312 -211 -33%
Net current transfers 602 195 -68%
Capital Account 11 -9.5 /
Financial Account 29 -1014 /
Net FDI 641 274 -57%
Net errors and omissions 346 399 15%
OVERALL BALANCE -176 -1045 495%
Source: Bulgarian central bank      

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