Bulgaria Country Report - March, 2014

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Bulgaria Country Report - March, 2014

This report covers the key macroeconomic releases as well as the financial and political events that took place in Bulgaria between March 6 and April 7, 2014.

Bulgaria's government revised up its projections for the country's economic growth this year to 2.1% from previous 1.8% due to higher level of investments, supported by the government's own capital outlays. GDP growth is expected to accelerate to 2.6% in 2015 and further to 3.4% in 2016, driven by both improved household and investor spending. The Bulgarian economy expanded by 0.9% in 2013 on the back of strong exports to both the EU and other countries, according to preliminary estimates.

The overall business climate indicator increased 1.2 points month on month in March after staying flat the previous month on improved outlook in construction and retail trade. Furthermore, the calendar-adjusted industrial production index increased 2.3% year on year in January 2014, following zero annual growth in December (revised up from the preliminary estimate of 1% decline).

Consumer price deflation deepened to 2.6% year on year in February from 2.2% in January mainly due to lower transport costs, thus reaching its lowest level for the seven months in which prices have been falling.

Key points:
• Trade gap widens to EUR 324mn in January 2014
• Domestic PPI deflation deepens to 2.5% year on year in February on lower base metals prices
• January retail sales growth unchanged at 5.5% year on year
• Unemployment rate down 0.1pps month on month to 13.1% in February – Eurostat

• Public debt-to-GDP ratio up 1.9pps year on year to 18.4% at end-February 2014

• Banking sector net profit up 34.5% year on year to EUR 76.2mn in Jan-Feb 2014

Number of pages: 28
Release Date: Mon, 07 Apr 2014