Bulgaria Country Report - October, 2016

November 23, 2016

This report covers the key economic, financial and political releases for Bulgaria for the period October 20 – November 18.

On November 14, Prime Minister Boyko Borissov submitted to the parliament the resignation of the government he leads. The move came after the second round of the presidential election was won by the candidate supported by the opposition Bulgarian Socialist Party (BSP). The parliament accepted the cabinet's resignation on November 16.

Total has discovered oil in a Bulgarian Black Sea offshore block, the French energy company said in its third-quarter results report.

Bulgaria’s real GDP growth decelerated to 3.5% y/y in the third quarter of 2016 from 3.6% y/y in the previous three months, a seasonally-adjusted statistics office flash estimate showed.

In its autumn European Economic Forecast, the European Commission (EC) revised upwards its projections for Bulgaria’s GDP growth in 2016 and 2017 to 3.1% and 2.9% respectively. The European Bank for Reconstruction and Development (EBRD) has raised its forecasts of Bulgaria’s real GDP growth to 2.8% in both 2016 and 2017, the institution said in its Regional Economic Prospects report on November 3.

Bulgaria's overall business climate indicator decreased 1.3 points m/m in October, after staying flat m/m in the previous two months. The industrial production increased 3.3% y/y in September, accelerating from a 2.6% y/y rise in August. The construction output decline steadied at 10% y/y in September. The annual growth of retail sales (at constant prices) slowed down to 2% from 5.3%.

Key points:
• The CPI declined by 0.6% y/y in October, following a drop of the same size in September
• Bulgaria reported a consolidated budget surplus of BGN3.41bn (€1.74bn) in January-October 2016, equal to around 3.8% of projected GDP, preliminary data from the finance ministry showed
• The country reported a current account surplus of €2.13bn in the first nine months of 2016, up from a surplus of €954.6mn in the same period of 2015

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