Bulgaria's current account swings to EUR 1.1bn surplus in Jan-Oct 2013

By bne IntelliNews December 16, 2013

Bulgaria's current account balance showed a surplus of EUR 1.1bn in Jan-Oct 2013 versus EUR 202mn deficit in the same period last year, thanks to a shrinking merchandise trade gap and growing net current transfers surplus, preliminary central bank data showed. 

The deficit of the goods balance shrank 39.5% y/y to EUR 1.79bn in the first ten months of 2013 as soaring exports (up 7.8% y/y) outpaced modest imports growth (up 0.9% y/y).

The net current transfers surplus rose 25.3% y/y to EUR 2.06bn in Jan-Oct, due to better absorption of EU funds this year, which were up 52% y/y to EUR 1.1bn. The growth of these transfers might decelerate in the coming months as the EC recently decided to freeze EUR 939mn worth of prospective payments to Bulgaria under operational programme environment for a period of up to six months over suspicions of abuse in awarding public procurement contracts.

Remittances from Bulgarians living abroad edged up 0.8% y/y to EUR 687mn in Jan-Oct.

On the negative side, the income balance gap widened 3.6% y/y to EUR 1.15bn and the surplus on the balance of services declined 9.6% y/y to EUR 2bn. Tourism revenues rose 4.9% y/y to EUR 2.8bn in Jan-Oct and spending on tourist services abroad increased 14.4% y/y to EUR 998mn. As a result, the net tourism revenue inched up 0.4% y/y to EUR 1.84bn.

The surplus on the capital account more than doubled over the reported period. It stood at EUR 297mn in Jan-Oct 2013 versus EUR 140mn a year earlier.

The financial account registered a deficit of EUR 2bn, following a surplus of EUR 1.94bn a year ago. The significant deterioration is linked to the repayment of government debt (a EUR 878mn global bond was retired in January) and contracting FDI inflows (down 43% y/y to EUR 1bn).

Bulgaria's balance of payments posted a gap of EUR 711.3mn in Jan-Oct 2013 versus a EUR 1.61bn surplus in the same period of 2012.

Bulgaria, BoP, EUR mn Jan-Oct'12 Jan-Oct'13 Change y/y
Current Account -201.5 1134.0 /
Goods balance -2970.3 -1795.8 -39.5%
Services balance 2235.3 2019.9 -9.6%
Income balance -1116.1 -1156.7 3.6%
Net current transfers 1649.6 2066.6 25.3%
Capital Account 139.9 296.8 112.1%
Financial Account 1943.0 -2042.2 /
Net FDI 1680.9 960.0 -42.9%
Net errors and omissions -271.4 -100.0 -63.2%
OVERALL BALANCE 1610.0 -711.3 /
Source: BNB      

 

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