Bulgaria Country Report - September, 2013

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Bulgaria Country Report - September, 2013

In September,Bulgarian finance minister Petar Chobanov said he expects the economy to expand by 0.6% in 2013 but growth should accelerate to 1.8% in 2014. Meanwhile, the IMF lowered its projection for Bulgaria's 2013 GDP growth to 0.5%, down from an earlier estimate of 1.2%.

The general government spent BGN 212.7mn (EUR 108.7mn) more than it received in revenue in January to August 2013, resulting in a consolidated budget deficit equal to 0.26% of the full-year GDP projection. In the same period of 2012, the budget posted a BGN 107.6mn surplus.

Further on the fiscal side,the government is seeking to wrap up by October 20 talks about the terms of a BGN700mn (EUR 360mn) loan it plans to take from German banks to finance its budget gap.

The public debt, excluding state guarantees, fell 5.5% m/m to EUR 6.52bn at end-August 2013 and was equal to 15.9% of the full-year GDP forecast (down from 17.5% a year earlier). The calendar-adjusted industrial production index dropped 2.4% year on year in August, slowing from a 2.6% decline posted the month before on the back of smaller contraction in mining and utilities output.

The foreign trade deficit shrank 46% year on year to BGN 2.62bn (EUR 1.34bn) in January-August 2013 on the back of stable exports growth and declining value of imports. In relation to that, the current account recorded a surplus of EUR 373mn in January to July 2013 as compared to a EUR 646mn deficit for the same period of 2012 due to shrinking merchandise trade gap.

Both of the two most popular parties in the country -BSP and CEDB-gained support in September. However, though BSP retained its lead, the gap between it and CEDB narrowed to 3.3pps from 4.2pps in August.

Number of pages: 22
Release Date: Mon, 14 Oct 2013