Bi-Weekly Report 12 - 25 November 2019


External rebalancing continued for a 16th consecutive month in September, with the 12-month rolling current account balance moving into a surplus of 0.8% of GDP (the highest in almost 20 years) from a deficit of 7.1% in June (the highest in 6 years)



Adjusted for the purchase of military equipment (worth 1.8% of GDP), the (underlying) government budget surplus widened by 0.4 pps y-o-y to 2.8% of GDP in 9M:19, due to tighter current spending controls and higher EU grants

Bulgaria’s already low gross public debt is set to decline further in FY:20, on the back of healthy GDP growth negative ex-post real interest rates and a primary surplus



Easing inflation and strong appreciation pressures on the RSD strengthened the NBS’ hand to lower its key rate by a further 25 bps to 2.25%

A smaller-than-initially-expected fiscal deterioration in 9M:19 provides room for a (higher-than-budgeted) increase in expenditure in Q4:19



Fiscal prudence continued in 9M:19, with the budget surplus reaching a post-crisis high of 4.2% of GDP, on a 12-month rolling basis, in September from 3.5% in FY:18 (excluding the once-off impact of the sale of the Cyprus Cooperative Bank)



Bi-Weekly Report 12 - 25 November 2019