Bulgaria’s GDP (in seasonally and working-day adjusted terms) expanded by real 0.5% y/y in
Q1 2012 but remained flat against the previous quarter, according to preliminary data of NSI.
The annual growth rate decelerated from 1.6% y/y in Q4 2011. Supply-side breakdown
indicates negative contribution on the part of the services sector. The agriculture grew by
12.4% y/y, up from 4.9% annual growth in Q4. Industry sector growth continued falling to 2%
y/y in Q1 from 2.6% y/y in the previous quarter. Adjustments marked a significant increase of
7.6% y/y, indicating better indirect tax collection than a year earlier. On the demand side,
exports growth turned negative at 1.9% y/y in Q1, reflecting contracted external demand and
downward trend that has been evident on the CA since the start of the year. Imports were
below their year-ago levels as well, falling by 1.6% y/y in Q1. Investment in fixed capital
declined at a slower pace compared to Q4 - by 3.4% y/y in Q1.
Bulgaria’s CPI inflation remained at 1.7% y/y in April 2012 for a second consecutive month
in a row. In monthly terms, consumer prices rose by 0.2% during the month, down from 0.3%
m/m in March. The prices of alcohol and tobacco, furniture and household goods,
communication, recreational and culture services declined in April compared to a year earlier,
while prices of transport, education and utilities rose the most (by 8.5% y/y, 6.4% y/y and
5.1% y/y, respectively). The annual average inflation for the 12-month period ending in April
2012 slowed to 3.2% y/y from revised 3.4% y/y in March and an average of 4.2% in 2011.
Consumer prices have increased by 1.6% since the beginning of the year. The EU
harmonized inflation index (HICP), used as a benchmark for the euro adoption, rose by 2% y/
y, slightly up from 1.7% y/y in March. In monthly terms, HICP rose by 0.2% (0.2% in March).
The government expects HICP inflation to slow down to 2.6% at the end of 2012 and to an
average of 2.1% in 2012. The rising world oil prices will push up consumer prices in the
country in the mid-term helped by administrative upward corrections of energy prices. On the
downside, weak consumption and the still stiff labor market will compensate the above effect.
The general budget registered a deficit of BGN 687.2mn (EUR 351.4mn) in Q1 2012, down by 7.4% y/y. The rate of budget gap narrowing slowed considerably in March from 24.7% y/y in January-February and 37.6% y/y in Jaunty. The gap expanded by 21.6% m/m and accounted for 0.9% of the full-year GDP projection. Total budget revenues increased by 7.7% y/y driven mainly by VAT revenues, which rose by 33.4% y/y. In January-March, revenues reached 20.7% of the planned for the year. Total expenditures (including the contribution to the EU budget) rose by 5.9% y/y and accounted for 22.3% of the year-end projection. The general budget deficit fell by 43.2% y/y in 2011 to 2.1% of the full-year GDP
flash estimate, running below the target of 2.5% of GDP set in the budget law. The
government will target a budget deficit of 1.35% of the projected full-year GDP in 2012.
Bulgaria's CA deficit posted 1% of GDP as of February 2012. Bulgaria’s real effective exchange rate kept falling in February 2012. Bulgaria’s foreign debt declined by 5% y/y to EUR 35.1bn at end-February 2012. Foreign reserves registered EUR 13.2 bn in March 2012. Bulgaria's economy is expected to grow between 1.4% - 4% in 2012-2015. In March 2012 the business conjuncture in the country has slightly improved. Bulgaria’s consumer price inflation decelerated by 1.7% y/y in March 2012. Bulgaria’s industrial production declined by 4% y/y February 2012. Bulgaria's retail sales grew up by 2.4% y/y in February 2012. Bulgaria's unemployment rate rose to 12.4% in February 2012 above the EU level
Bulgaria’s general budget deficit declined by 24.7% y/y in February 2012. Bulgaria’s fiscal reserve declined by 5.6% m/m in February 2012. Bulgaria’s public debt up 14% y/y to EUR 5.97bn at end-February 2012. Money supply (M3 aggregate) increased by 10.7% y/y in March 2012. Domestic credit increased by 5.5% y/y in March 2012. Bulgarian share indices ended mixed March 2012.
In Q1 2012 the average decrease of the market prices of the dwellings was 4.3%
y/y.In March 2012 total assets of the banking system increased by 1.4% y/y and
reached BGN 77.9 bn.
The final draft of the updated convergence programme, sent to the EC, outlines the fiscal policy in the period from 2012 through 2015 and assumes gradual recovery of external environment and domestic consumption. The document envisages pursuing conservative fiscal policy with budget gap remaining below the 3% ceiling. In the period 2012-2014 the output gap will fall from 2.4% in 2012 to 0.8% in 2014 as the economy gets closer to its potential. In 2015, growth in demand will actually outpace supply by 0.2% and the economy will register a 4% growth. Investment and consumption growth will however remain below their pre-crisis level in the period through 2015. In 2012, the government expects 1.4%
economic growth, driven by improved external environment in H2 and gradual recovery in domestic demand. Negative developments in net exports will hamper economic growth this year. Consumption is expected to rise by 0.7%, supported by labour market stabilisation in the second half of the year. Investments will recover, partly due to base effects but also as a result of improved utilisation of EU funds. Exports growth will moderate to 4.6% in 2015, while imports will be fuelled by recovering domestic demand. The economy is seen to grow by 2.5% in 2013. In 2011, Bulgaria registered 1.7% GDP growth.
Bulgaria’s industrial production index declined by real 4% y/y in February 2012. The
contraction sustained for a third month in a row steepening from revised 1.1% y/y in January 2011. The decline in the manufacturing sector accelerated to 5.2% y/y compared to 1.3% y/y in January. The sub-sectors that contracted the most during the month were textiles, apparel, wood material, chemical and metal products. The mining industry turned to 9.3% annual growth in February, reversing a 0.9% decline in January. This was due to the metal ore mining sub-sector, which registered the strongest growth, expanding by 43.9% y/y. The utilities sector also posted deteriorated results in February, as the output contracted by 4.1%
y/y. The number of industry branches, which posted annual growth in February, was 10 out of 27, as compared to 11 in the previous month. In seasonally-adjusted terms, the industrial production fell by 2.1% m/m and 3.7% y/y in February. The industrial turnover index increased by 4.8% y/y as domestic turnover went up by 5.2% y/y and exports added 4.3% y/y, up from January's 4.2% growth. The industrial output is likely to remain in negative territory in the mid-term. Falling foreign demand and still weak domestic sector will continue to hamper industry output growth. Exports turned to decline already in January, dropping by
10.2% y/y, following a robust 30% expansion in 2011.
Bulgaria’s general budget deficit declined by 24.7% y/y in February 2012
The general budget posted a deficit of BGN 565mn (EUR 288.9mn) in January-February 2012, down by 24.7% y/y. The gap expanded by almost 90% m/m and accounted for 0.7% of the full-year GDP projection as compared to 1% of GDP a year earlier. Total budget revenues increased by 11.5% y/y driven mainly by VAT revenues, which rose by 30.4% y/y. In January-February revenues reached 12.5% of the planned for the year. Total expenditures rose by 4.8% y/y and accounted for 14.2% of the year-end projection. The general budget deficit fell by 43.2% y/y in 2011 to 2.1% of the full-year GDP flash estimate, running below the target of 2.5% of GDP set in the budget law. The government will target a budget deficit
of 1.35% of the projected full-year GDP in 2012.
In January 2012 the current account was negative and amounted to EUR
112 mn or 0.3% of GDP. The gross external debt amounted to EUR 35,151.7 mn or 85.4% of GDP. Foreign reserves registered EUR 12.79 bn in February 2012
Bulgaria’s GDP growth revised grew up to 1.6% y/y in Q4, 1.7% in 2011. In February 2012 the total business climate indicator marked a decrease
by 2.4 percentage points. Bulgaria’s consumer inflation slows down to 2% y/y in February 2012. In January 2012 total Producer Price Index grew by 4.8% y/y
Bulgaria’s industrial production falls 3.1% y/y January 2012. Retail sales in Bulgaria declined by 2.6% y/y in January 2012. In Q4 2011 hourly labour cost rose by 9.7% y/y. Bulgaria's unemployment rate reached 11.5% at end-February 2012.
Bulgaria’s general budget deficit narrows by 37.6% y/y in Jan 2012. Fiscal reserve declined by 19.4% m/m in January 2012 on one-off payments. Public debt declined to EUR 5.89bn at end-January 2012. In February 2012, the broad money (monetary aggregate M3) was BGN 57.406 bn or 71.3% of GDP. In February 2012 the domestic credit amounted to BGN 54.657bn and increased by 6.9 y/y.
In February 2012 Bulgarian share idices trends fluctuated. As of 29 February 2012, the profit of the banking sector amounted to BGN 118 mn.