In the period January – August 2008, the Current and Capital account deficit was EUR 4,542.9 mn (13.4% of GDP), against a deficit of EUR 3,249.6 mn (11.2% of GDP) for the same period in 2007
The consumer price index for September is 101.1%. The average relative growth of the consumer prices since the beginning of the year is 7.4%. Compare to the same month previous year the consumer price index is 11%
According to the NSI preliminary data in August the industrial production dropped with 13.1% compare to the same month previous year
The total amount of the revenues on the consolidated fiscal program (CFP) for the first 8 months of the year amounted to BGN 18 630.3 mn which is 68.5% of the expected revenues till the end of 2008
The money supply growth in August was 1.5 % m/m. On annual base M3 slows down up to 20.96% compared to 23.83% in July
The borrowing of non government sector slows down its growth, to 48.4% on annual base at the end of August (in July it was 51.4%) and reached BGN 47.577
In August the total assets in the banking system increased by BGN 2.2 bn (3.4%), reaching BGN 69.1 bn at the end of the month
The indexes SOFIX and BG40 continue to fall in August. SOFIX reached its lowest level since July 2005
The average price of the property in the seventh biggest cities in Bulgaria dropped with 15.8% in September compare to Q2 2008.
I. EXTERNAL SECTOR
1. Balance of Payments
In the period January – August 2008, the Current and Capital account deficit was EUR 4,542.9 mn (13.4% of GDP*), against a deficit of EUR 3,249.6 mn (11.2% of GDP) for the same period in 2007.
In the period January – August 2008, the Current and Capital account deficit was EUR 4,542.9 mn (13.4% of GDP**), against a deficit of EUR 3,249.6 mn (11.2% of GDP) for the same period in 2007.
In August 2008 the Current account was negative and amounted to EUR 227.6 min, compared to a negative account of EUR 265.3 mn for the same month in 2007. In the period January – August 2008, the current account deficit was EUR 4,769.7 mn (14% of GDP), against a deficit of EUR 3,358.4 mn (11.6% of GDP) for the same period in 2007. The main factor for the increase of the current account deficit was the higher (by EUR 1,374.1 mn) trade deficit.
The trade deficit*** in January – August 2008 amounted to EUR 5,748.2 mn (16.9% of GDP), compared to a deficit of EUR 4,374.2 mn (15.1% of GDP) for the same period in 2007. The trade deficit increase was also due to the increase of crude oil and natural gas prices.
The Capital account balance was positive amounting to EUR 226.8 mn, compared to a positive balance of EUR 108.8 mn for the same period in 2007.
The Financial account balance was positive amounting to EUR 6,821.2 mn, compared to a positive balance of EUR 6,144.4 mn for the same period in 2007.
Foreign direct investment abroad was EUR 403.4 mn against EUR 125 mn for the same period in 2007.**** Foreign direct investment in Bulgaria***** was EUR 2,980.5 mn (8.8% of GDP) against EUR 4,154.1 mn (14.4% of GDP) for the same period in 2007. The direct investment covered 62.5% of the current account deficit against 123.7% for January – August 2007.
Portfolio investment - assets increased by EUR 140.1 mn, compared to a decrease of EUR 48 mn for the same period in 2007. Portfolio investment – liabilities decreased by EUR 126 mn. In the period January – August 2007, the liabilities decreased by EUR 248.9 mn.
Other investment – assets decreased by EUR 312 mn, compared to an increase of EUR 205.8 mn for the same period in 2007. Other investment – liabilities increased by EUR 4,285.3 mn against an increase of EUR 2,586.6 mn for January – August 2007.
The item Net errors and omissions was positive, amounting to EUR 141.4 mn. For the same period in 2007 the item was negative amounting to EUR 1,248.4 mn.
The Overall balance was positive, amounting to EUR 2,419.7 mn compared to a positive overall balance of EUR 1,646.3 mn for the same period in 2007.
In the period January – August 2008 the BNB reserve assets****** increased by EUR 2419.7 mn.
Exports (FOB) amounted to EUR 10,560.9 mn against EUR 8630.4 mn for the same period in 2007, increasing by 22.4% yoy against 9.6% for the same period in the previous year. Imports (FOB) amounted to EUR 16,309.1 mn, against EUR 13,004.5 mn for January – August period in 2007, increasing by 25.4% yoy against 17.3% for the same period in the previous year. The difference in imports growth rates yoy for the reporting period in 2008 and for the same period in 2007 was due to the increase of crude oil and natural gas prices.
The balance on the Services item was positive, amounting to EUR 1,009.9 mn (3% of GDP), against a positive balance amounting to EUR 1,056.4 mn (3.7% of GDP) for the same period in 2007.
Income (net) item was negative amounting to EUR 559.6 mn compared to a negative item of EUR 233.2 mn for the same period in 2007.
Net Current transfers amounted to EUR 528.2 mn (1.6% of GDP) against EUR 192.6 mn (0.7% of GDP) for the same period in 2007.
Balance of payments (chart)
- Source: Bulgarian National Bank
Balance of Payments, EUR mn, Analytical report (table)
Foreign Trade (EUR mn) (chart)
- Source: Bulgarian National Bank
* GDP for 2007 (preliminary NSI data) - EUR 28,898 million and GDP for 2008 estimated at - EUR 34,022 million.
** GDP for 2007 (preliminary NSI data) - EUR 28,898 million and GDP for 2008 estimated at - EUR 34,022 million.
*** Exports and imports data should be interpreted carefully due to the problems with their coverage and quality after the introduction of the INTRASTAT system as from January 1, 2007
**** The difference between the investments for the two periods was mainly due to an investment made abroad in March 2008 by a Bulgarian subsidiary of a big multinational company.
***** The preliminary data for 2007 and 2008 are subject to revisions with the quarterly reports to the BNB from foreign direct investment enterprises and with the annual NSI data, and for 2008 also with the quarterly NSI data.
****** Excluding valuation changes.
II. REAL SECTOR
1. Inflation
The consumer price index for September is 101.1%. The average relative growth of the consumer prices since the beginning of the year is 7.4%. Compare to the same month previous tear the consumer price index is 11%.
The consumer price index for September is 101.1%. The average relative growth of the consumer prices since the beginning of the year is 7.4%. Compare to the same month previous year the consumer price index is 11%.
Compare to the same period previous year the inflation for the period January-September 2008 is 13.5%.
In September the price of food items rose with 2%, the alcohol and cigarettes with 0.3%, the clothes and shoes with 3.4%, the education with 10.9%.
The HICP inflation based on the EU – harmonized consumer basket rose with 0.9% in September. The accumulated inflation since the beginning of the year is 8.0%. Compared to the same month previous year the increase of the consumer prices is 11.4%.
Price Dynamics (Jan/05-July/08) (chart)
Source: National Statistical Institute
2. Industrial sales
According to the NSI preliminary data the industrial production dropped with 13.1% in August compare to the same month previous year.
According to the NSI preliminary data the industrial production dropped with 13.1% in August compare to the same month previous year. The industrial production index is determined mainly form the manufacturing industry decrease (6.3%), which dropped with 17%, compare to July 2008. Compare to the same month previous year 2007 the industry production in August 2008 decrease with 6.2%.
According to the preliminary data the revenues from the industry in August 2008 decrease with 13.3 % compare to the same month previous year.
The manufacturing industry revenues dropped with 14.9% compare to July 2008.
Industrial sales & Output, % y/y (chart)
Source: National Statistical Institute
3. Retail sales
The retail sales growth with 2.3% compares to July 2008, according to the NSI preliminary data.
The retail sales growth with 2.3% which was due to the main trade activities varying between 6.0% for the non – specialized trade with different commodities to 0.2% for the trade made out of the shops .The trade with food, drinks and cigarettes production increase with 3.1%, while the pharmacy and medical commodities and the commodities for the house holds increase respectively with 3.8 and 5.2%.
The retail sales dropped with only 0.4% in August. The decrease is mainly determined from the wholesale trade which dropped with 3.8% in August and the vehicles and fuel trade which dropped with 5.2%.
Source: National Statistical Institute
III. FISCAL SECTOR
The total amount of the revenues on the consolidated fiscal program (CFP) for the first 8 months of the year mounted to BGN 18 630.3 mn which is 68.5% of the expected revenues till the end of 2008
The total amount of the revenues on the consolidated fiscal program (CFP) for the first 8 months of the year mounted to BGN 18 630.3 mn which is 68.5% of the expected revenues till the end of 2008. Compared to the same period previous year the revenues are 22.2% higher (BGN 3 389.2 mn). The consolidated budget expenditures (including the installment for the EU budget) amounted to BGN 13 998.4 mn at the end of August, which is 55.2% of the annual prognosis. The fiscal reserve amounted to BGN 11 544.3 mn. The revenues of the republican budget at the end of August amounted to BGN 12 845.8 mn which is an increase of 70.2%, according to the prognosis, made for the 2008. Compare to the same period previous year the revenues had increased with 22.4% or BGN 2 352.2 mn. The tax income at the end of August amounted to BGN 10 947.1 mn, which is 65.4% of the prognosis till the end of 2008. Compared to the same period previous year the direct taxes had increased with 21.3% (BGN 1 922.4 mn).
IV. MONETARY SECTOR
1. Моnetary Aggregates
The money supply growth in August was 1.5% m/m. On annual base M3 slows down up to 20.96% compared to 23.83% in July.
The money supply growth in August was 1.5 % m/m. On annual base M3 slows down up to 20.96% compared to 23.83% in July. The detonation growth was determined of the lower growth of the overnight deposits in BGN and foreign currency, which was partly, compensated with the contract deposits growth.
At the end of August the currency reserves of the country continue to grow and reached BGN 28 119 bn. The monthly dynamics of the reserves was determined by increasing the government deposit as well as the National Bank’s deposit increase.
Money Supply (M3) BGN mn, end-of-month (chart)
Source: Bulgarian National Bank
2. Domestic credit
The borrowing of non government sector slows down its growth, to 48.4% on annual base at the end of August (in July it was 51.4%) and reached BGN 47.577.
The borrowing of non government sector slows down its growth, to 48.4% on annual base at the end of August (in July it was 51.4%) and reached BGN 47.577. The alternation in the credit dynamic was due to the household credits decrease with 10.8% up to 36.4% on annual base. The corporate ones reached 53.6% in August from 54.97% in July on annual base. The decrease in mortgages was as well significant (53.6%y/y).
The interest rate increase of the borrowings, did not lead to worsening the bank’s credit portfolio. The share of the irregularly unattended credits stayed low. The slow down in the consumer credits most probably is due to the restriction in the credit giving. The consumer credits do not have higher interest rates compare to the mortgages, but are distinguished as risky one.
At the end of August the borrowings form the private sector reached 103.4% form 102.75% in July of the trading banks assets.
The resident’s deposits in August amounted to BGN 37 082 bn, but couldn’t fully finance the credit activity of the banks.
The credit expansion is expected to increase, as the main financial intermediary in the country is the banking sector. In the same time the continuance tendency of the interest rates raise render the demand of the borrowing. As a result of that the banks have to search for an external financing. The non-resident’s deposits in local banks rose abruptly with BGN 1 301 bn up to BGN 17 263 bn., which lead additionally to worsening of the net foreign assets up to BGN 9 853 bn.
Domestic credit, % of GDP (table)
Source: BNB's Monetary survey and Balance sheet of the banking system
V. FINANCIAL SECTOR
1. Banking Sector
In August the total assets in the banking system increased by BGN 2.2 bn (3.4%), reaching BGN 69.1 bn at the end of the month.
In August the total assets in the banking system increased by BGN 2.2 bn. (3.4%), reaching BGN 69.1 bn at the end of the month. The monthly growth was most contributed by the group of small and medium-size banks. From a systemwide perspective, there is an increase in loans and advances, cash, and securities. Compared to 31 August 2007, the assets in the banking sector have increased by BGN 18.5 bn. (36.6%). The market share of the five largest credit institutions was slightly decreased at 31 August 2008 to 57.1%.
Loans and advances amounted to BGN 54.5 bn, marking a monthly growth of 3.4% on account of the increase in all portfolio segments. In August, the largest rise, as a percentage and in absolute terms, is seen in the claims on credit institutions, owing to the active operations of several banks. Loans to corporations increased by 2.4% and rank second in terms of monthly growth of loans and advances. Retail exposures registered a lower growth rate – 1.8% - conditioned by consumer loans dynamics. Compared to August 2007, the total amount of corporate loans and retail exposures evidenced a 49.1% growth. In the month, the impairment of loans from both portfolio segments increased by 2.5%.
In August the attracted funds increased by 3.3%, and their reported growth rate is similar to that of assets. The growth is mainly on account of the resources from credit institutions, which increased by BGN 1034 mn. The deposits of individuals and households increased by BGN 563 million, and the resources from institutions other than credit ones – by BGN 333 mn. As of end-August, the deposits of the population remained as the largest source of funds with a 36% share in the total amount of attracted funds in the banking system.
In the month, the balance sheet aggregate total capital increased by BGN 155 mn. (2.2%) as a result of the increase in the current year income. For a year, the item total capital increased by 37.3%.
For the eight months of 2008, the profit accumulated in the banking sector amounts to BGN 994 million, i.e. by BGN 250 mn (33.6%) higher than the performance reported as of 31 August 2007.
The level of liquidity in the banking system at the end of August shows sufficient coverage of attracted resources.
2. Stock exchange
The indexes SOFIX and BG40 continue to fall in August. SOFIX reached its lowest level since July 2007.
The indexes SOFIX and BG40 continue to fall in August. SOFIX reached its lowest level since July 2007.
The Bulgarian Stock exchange – Sofia (BSE – Sofia) registered for trading on the unofficial market of bonds the following corporate bond issues:
3 year binds 2.0 mn. issued by Alu-Plast EAD – Sofia, interest: 7.80%, issue date: 27.06.2008, 6 –month coupon payment.
5 year bonds for EUR 11.00 mn. issued by TBI credit EAD – Sofia, interest 6.50%, issue date: 27.06.2008, 6 month coupon payment.
The monthly secondary market stock-exchange turnover of municipal and corporate bonds decreased by nearby 60% in August amounting to BGN 7.5 mn. (a daily average of BGN 0.35 mn.) compared to BGN 19.5 mn. in July.
The prices of EUR-denominated 2013 Global kept on staying under 208% mark, and of USD – denominated 2015 Global, remained under the 114% level.
On the secondary market the price of the comparison instruments was about BGN 0.40 per item. The comparison instruments market turnover increased to BGN 5.1 (a daily average of BGN 0.24 mn.) compared with BGN 4.9 mn. in July. Deals concluded off-stock-exchange in August amounted to BGN 0.1 mn.
SOFIX & BG 40: 03/01/07 - 30/09/2008 (chart)
Source: Investor BG
3. Real estate
The average price of the property in the seventh biggest cities in Bulgaria dropped with 15.8% in September compare to Q2 2008.
The average price of the property in the seventh biggest cities in Bulgaria dropped with 15.8% in September compare to Q2 2008. According to NSI data and www.imot.bg data the most considerable drop was reported in Burgas, where compare to Q2 2008 the property prices dropped with 30.8%, followed by Blagoevgrad 21.8%, Plovdiv 16.7%, Sofia – city 16.3% and Stara Zagora 14.2%. The only cities in which the prices` dropped under 10 % were Pleven 9.1% and Varna 6.8%.
Property prices sq/m in BGN for the period 2006-30.09. 2008 for the 7 bigest cities in Bulgaria (chart)
Source: National Statistical Institiute (2007, Q1 2008, Q2 2008); * www.imot.bg (30.09.2008)
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Copyright: 2006 Obedinena Bulgarska Banka AD. All rights reserved. For further Information please contact UBB, 5 Sveta Sofia Str., 1040 Sofia, Bulgaria Tel. +359 2 811 29 80, fax: +359 2 988 08 22, e-mail: cekova_p@ubb.bg, web site: http://www.ubb.bg
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Bulletin EN Sept 2008.pdf, 215 Kb
