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Comments on latest BoP data.
submited on 17.05.2006 in category Fiscal affairs | Monetary policy | Macroeconomic developments
submited on 17.05.2006 in category Fiscal affairs | Monetary policy | Macroeconomic developments
Current account deficit widened by 91% in Q1 of 2006 compared to Q1 of 2005 to reach EUR -1 052 million. At the same time the financial account balance went down by -44% to EUR 570 million. Thus domestic savings rate continued to decrease. For 2005 it was 16.2% of GDP compared to 17.6% in 2004. Both exports and imports of goods intensified in Q1, at rates of 28% and 33% to Q1 of 2005 respectively. International tourism revenues however stagnated, while travel by Bulgarians abroad went up by 8.8%. Income from work abroad stayed stable at about EUR 220 million, while transfer from non-residents shrank sizably by 18%. Foreign direct investment and external credit to non-financial sector grew quite fast by 93% and 54%. At the same time, the banking sectored “exported” some EUR 370 million.
Credit to private sector expanded quite visibly in April by 2.7% after a modest change of 0.3% in March. By the end of April it reached BGN 19 468 million. Broad money grew at a slow rate of 0.9% while monetary base soared by 4%. In the mid-term (6-months) M3 indicator is rising at a lower pace compared to the monetary base, which raises some doubts over the perception of an extraordinary credit expansion in the country. The monetary multiplier fell below 3.00, a level lower than ever in recent history of the Bulgarian financial system and similar to levels that prevailed before mid-2000. Because of the budget surplus since the beginning of the year the government gradually piled up higher fiscal reserve at its Central Bank account – a 11.4% increase in April (after another 9% growth in March). The Currency board assets rose even faster by BGN 621 million.
The budget surplus by the end of March reached BGN 429 million, or a BGN 282 million growth since February. It is however slightly lower than the amount at the same time of 2005. Expenditures are growing by 7.1% (6.5% by February), which exceeds substantially the growth rate of revenues (5.1%) but is still lower than the nominal GDP growth (which is close to 10%). The major factor for the slowdown of revenue growth is the reduction of pension contribution by 6 percentage points, which lead to a 2.7% decrease in social security revenues for the quarter. If the latter are not taken into account, all other public revenue grow by 7.6% to the same period of 2005.
Credit to private sector expanded quite visibly in April by 2.7% after a modest change of 0.3% in March. By the end of April it reached BGN 19 468 million. Broad money grew at a slow rate of 0.9% while monetary base soared by 4%. In the mid-term (6-months) M3 indicator is rising at a lower pace compared to the monetary base, which raises some doubts over the perception of an extraordinary credit expansion in the country. The monetary multiplier fell below 3.00, a level lower than ever in recent history of the Bulgarian financial system and similar to levels that prevailed before mid-2000. Because of the budget surplus since the beginning of the year the government gradually piled up higher fiscal reserve at its Central Bank account – a 11.4% increase in April (after another 9% growth in March). The Currency board assets rose even faster by BGN 621 million.
The budget surplus by the end of March reached BGN 429 million, or a BGN 282 million growth since February. It is however slightly lower than the amount at the same time of 2005. Expenditures are growing by 7.1% (6.5% by February), which exceeds substantially the growth rate of revenues (5.1%) but is still lower than the nominal GDP growth (which is close to 10%). The major factor for the slowdown of revenue growth is the reduction of pension contribution by 6 percentage points, which lead to a 2.7% decrease in social security revenues for the quarter. If the latter are not taken into account, all other public revenue grow by 7.6% to the same period of 2005.
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