Bulgaria Country Report - July , 2016

August 20, 2016

This report covers the key macroeconomic, financial and political releases for Bulgaria for the period since July 17, 2016.

Bulgaria’s real GDP growth accelerated to 3% y/y in the second quarter of 2016 from 2.9% y/y in the previous three months, a seasonally-adjusted statistics office flash estimate showed on August 12.

The asset quality review (AQR) and stress test of the banks in Bulgaria have shown that the country’s banking system is stable and no public support will be needed, central bank governor Dimitar Radev said in a statement on August 11. The commercial banks First Investment Bank (Fibank) and Investbank are expected to build up additional capital buffers, of BGN205.7mn (€105.2mn) and BGN33.3mn respectively, according to detailed results published on August 13.

Bulgaria's business confidence deteriorated in July. The industrial production increased by 3.9% y/y in June, reversing a 3.4% y/y decline in May. Bulgaria's construction output fell 13% y/y in June, after decreasing by 8.2% y/y the month before. Retail sales (at constant prices) increased by 5.4% y/y in June, accelerating from a 4% y/y rise in May.


Key points:
• The CPI edged down 0.2% y/y in July, after dropping by 1.3% y/y in June
• Bulgaria reported a consolidated budget surplus of BGN3.27bn in January-July, equal to around 3.7% of projected GDP, preliminary data from the finance ministry showed
• The country reported a current account surplus of €693.8mn in the first half of 2016, reversing a deficit of €91.9mn in H1 2015


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