Bulgaria Has Preserved Macroeconomic Stability, Reversed Energy Sector Reforms - EBRD
Thursday, 21 November 2013
Bulgaria has preserved its macroeconomic stability in a difficult economic and political environment, the European bank for Reconstruction and Development said in its latest Transition Report 2013.
“Fiscal deficits are very low by European Union (EU) standards and the public debt is among the lowest in the EU, although pressure to increase spending and reduce regulated prices has increased,” the EBRD said.
The international lender, however, noted that energy sector reforms have reversed. “The regulator has reduced electricity prices to even further below cost recovery levels, and public distribution companies are facing significant losses,” it commented. “These developments will have negative consequences for investment in the sector.
Financial sector stability remains strong, with favourable capital and liquidity buffers.”
Strong deposit growth is more than compensating for the reduction in banks’ foreign liabilities, but non-performing loans (NPLs) are still relatively high, at around 17% of total loans, the EBRD also said.