The October 2018 Report on Bulgarian Economy was released

The October 2018 issue of the Monthly Report on Bulgarian Economy was released. It assesses the short-term dynamics of main economic indicators.

According to the National Statistical Institute (NSI) flash estimates, GDP increased by 3% yoy s.a. in Q3 2018. The growth was driven by an increase in final consumption and gross fixed capital formation, up by 6.9% and 6.2%, respectively. Meanwhile, export decreased by 3.2% while the increase of import reached 5.1%.

Short-term business statistics reported weaker performance in September, as both industrial and construction production decreased on a year earlier, while growth in retail sales decelerated. At the same time industrial turnover speeded up, supported by domestic and foreign market sales. The business climate indicator decreased in October due to worsened expectations for the business situation in industry, retail and services, but remained above its long-term average.

The unemployment rate went further down to 5% in Q3, the lowest value since end-2008. The growth in nominal and real wage decelerated to 7.6% and 3.9% yoy, respectively. In October, the registered unemployment edged up on a month earlier to 5.9%, but decreased by 0.8 pps over the same month of 2017.

 Consumer prices, as measured by the HICP, increased by 0.2% mom in October, driven by higher prices of energy and of non-energy industrial goods. Annual inflation remained unchanged at 3.6%, while the slower increase in prices of services held back core inflation and it edged down to 2.5%.

The positive current account value in August added up to the accumulated surplus and in January-August it reached 3.6% of projected GDP. Gross external debt-to-GDP ratio stood at 61.1% at the end of the month.

Credit to the private sector grew by 7.4% yoy in September. Weighted average interest rate on credit to non-financial corporations went up by 53 bps, while the price of consumer loans and mortgages decreased on a month earlier. Weighted average interest rate on time deposits also decreased mom.

For the nine months of 2018, the balance on the consolidated fiscal program was positive, reaching BGN 2.7 billion (2.5% of projected GDP) at end-September. The surplus resulted from higher revenue over expenditure on the national budget.

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