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 account | 1,285.5 | 431.9 | -66.4% | |
| Trade balance | -1,699.0 | -2,138.1 | 25.8% | |
| Services balance | 2,081.3 | 2,097.8 | 0.8% | |
| Income balance | -1,107.9 | -873.2 | -21.2% | |
| Current transfers, net | 2,011.2 | 1,345.4 | -33.1% | |
| Capital account | 307.1 | 510.8 | 66.3% | |
| Financial account | -1,569.3 | 919.4 | / | |
| FDI in Bulgaria | 1,160.7 | 1,105.6 | -4.8% | |
| Reserve assets* | 248.7 | -985.5 | / | |
| *A negative sign indicates an increase in international reserves. | ||||
| Source: BNB | ||||
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