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Interest rates already rose
In the beginning of September some of the largest Bulgarian banks undertook a shift in their interest rate policy, as for the first time in a long while banks raised interest on credit. For now the increase is not that significant (in the range 0.25-0.50 percentage points) and is valid mainly for consumer and housing credit. Th...
Industry Watch released its report Housing Market in Bulgaria/Q3 2007
Industry Watch released its report Housing Market in Bulgaria/Q3 2007. Main topics include:• One of the fundamental preconditions for the mortgage crisis is the loose monetary policy, which the Federal Reserve followed, as in 2006 the base interest rate plunged to 1%. This allowed for people with relatively low income to accumul...
Inflation in Bulgaria – rationale and impact mechanisms
Inflation of the dollar and the euro, after it has been for several years notable in rapid price growth of industrial commodities, reached agriculture production as well. In the last year food commodities’ prices increased by around 30%, denominated in dollars, and slightly slower, if denominated in euro. This might explain most...
US mortgage crisis - implications for Bulgaria
?he mortgage-backed securities crisis in the US is a practical demonstration of the monetary theory. The monetary expansion triggers a business cycle, which induces growth of aggregate demand – not only for consumer goods but also for investments in long-term assets. In reality, we witness expansion of economic activity, as long...
The importance of pension funds is increasing
Pension fund’s net assets increased by 46.7% in the year to June, as the trend is toward considerable growth acceleration in all three segments. The aggregated data from the Financial Supervision Commission show that pension savings expanded to BGN 1.85 billion in the first half-year, and the penetration ratio reached 3.5% of GD...
Advantages of the flat tax rate
There have been several formal arguments in the discussion regarding introduction of a flat tax rate hitherto: tax reduction, tax competition with other economies in the EU, more fair income tax treatment.Tax treatment is something simple, but on the other hand, revenues generated by personal income tax will continue to grow wit...
Growth of housing prices slowed down
We have recently witnessed various forecasts made by analysts and market participants for new records on the housing market in 2007. According to released by NSI data however, growth of housing prices in regional cities in Q2 of 2007 was more moderate (5.4% compared to 9.3% in Q1). The relatively high price growth in the beginni...
Household assets grow steadily
In recent few years we observe in Bulgaria rising prices of long-term financial assets, strong acceleration of competition in the financial sector, introduction of new investment vehicles, rising real estate prices, considerable credit expansion with declining real interest rates and record GDP growth. This combined with improv...

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