Bulgarian development bank Bulgarian development bank


The national banking system is developing steadily, as most of its indicators improve

Economic and financial observer
Q4 2015


  • During the fourth quarter the Bulgarian economy continues to maintain the growth seen in the previous months of the year.
  • According to the flash estimates of the GDP the economy growth amounts to 3,1%, as the domestic demand has a greater contribution for the growth and the contribution of the net exports decreases.
  • The final consumption accelerates its growth (2,5% according to the flash estimates), as well as the gross fixed capital formation.
  • The data for the labour market continues to be very optimistic. The unemployment rate continues to decrease and during the fourth quarter of the year it amounts to 8.0%.
  • The coefficient of economic activity of the population, the level of employment, the relatively low number of discouraged persons are very close to the levels from 2007-2008, which were the best years of the labour market in recent decades.
  • The current account remains in surplus (1,2% of the GDP), due mainly to the improvement of the trade balance.
  • During the fourth quarter of the year the inflation in EU 28, the Eurozone and in particular in Bulgaria reduces again and the problem to overcome a possible future deflation is again on the agenda. The new decrease of the total HICP is largely due to the dynamics of the international oil prices, but the basic inflation also remains far from its target level, which predetermines ECB’s actions and its decision to extend the quantitative easing programme.
  • As of the end of 2015 Bulgaria has the highest deflation from the EU 28 countries.
  • The Consolidated Fiscal Programme deficit on a cash basis amounts to BGN 2,472.9 million (2.9% of the projected GDP) for 2015. Its target was achieved in such a way, envisaged in the revised State Budget Act, which was BGN 2 874 million or 3,3% of the projected GDP.
  • The better implementation of the state budget is entirely due to the higher revenues which exceed with 1,8% the revised budget projection. Tax revenues increase by BGN 1 828,6 million (7,9%), non-tax revenues – by BGN 245,1 million (7,1%), and revenues from grants (mainly EU grants) – by BGN 722,3 million (24,7%).
  • The national banking system is developing steadily, as most of its indicators improve. The assets of the banking system increase constantly and as of the end of December reach BGN 87,5 billion.
  • The demand for loan resource by non-financial companies and individuals still remains relatively low, and on annual basis the loans to companies decrease by 3%, and those for households remain almost at the same level as at the end of 2014.
  • There is a reduction of the share of non-performing loans with probability of default over 90 days and as of the end of December it is 15,4% of all loans (excluding banks),which is close to the share of non-performing loans from the end of 2011.
  • In 2015 the banking system’s profit after tax amounted to BGN 898 million. This is the biggest profit registered during this period of a calendar year since 2009, although in December the banks had relatively high impairment expenses.
  • Interest rates on loans and deposits continue downwards. Main factor, influencing the dynamics of interest rates in the country are the low reference interest rates in the Eurozone and in the US, the access to inexpensive borrowed funds for the commercial banks, as well as the introduced negative interest rate on „excess reserves“ held by the commercial banks with BNB.

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