The latest issue of the Monthly Report on Bulgarian economy was released

As a response to the outbreak of the COVID-19 pandemic in the spring of 2020 Bulgaria introduced a State of emergency from 13 March to 13 May 2020. After that period the State of emergency has been replaced by an Extraordinary epidemic situation, which in the beginning of 2021 has been extended until 30 April. After a well contained first wave of infections, the upsurge of new cases in the late autumn resulted in introduction of new measures in late October and additional restrictions in November 2020. As the second wave of infections subsided in late-December and early-January 2021, a gradual loosening of the partial lockdown was underway. Nevertheless, the growing daily number of new cases in the first half of March brought back the restrictions imposed earlier. Currently, Bulgaria is walking out of a third wave of infections with restrictions gradually relaxed.  

Short-term Business Statistics

In February, the decline in most of the short-term indicators decelerated, and industrial turnover posted an increase. Industrial output decreased by 4.3%, due to a decline in manufacture of beverages and manufacture of fabricated metal products. Industrial turnover on the foreign market increased by 7.2%, driven by manufacture of basic metals. In construction production, civil engineering increased, while building construction continued to decline, although at a slower pace. Retail trade decreased by 0.4%, though retail sale of non-food products (except fuel) reported increase. The business climate and the consumer confidence indicators continued to improve in March. Consumer confidence increased sharply, up by 6.3 points, due to more optimistic expectations for the general economic situation in the country, as well as for households’ future financial situation. The improvement in business climate came on the back of positive developments in all sectors. Expectations for the demand of services and for the construction activity were favourable.  

Labour market

According to the Employment Agency data the number of registered unemployed was 214 052 by the end of March, thus reporting a 2.7% yoy decrease for the first time since March 2020, when the first containment measures against the spread of COVID-19 were introduced. The unemployment outflow (persons who have found a new job or deregistered persons) was very close to its average level for the last five years. Recent dynamics of registered unemployed give us reason to expect that in April their number will fall below the levels observed in the pre-crisis period. 

 Inflation

The inflation rate as measured by the Harmonized Index of Consumer Prices (HICP) was 0.2% mom in March, mostly due to the steady increase in prices of transport fuels. The latter went up by 5.2% over February, contributing by 0.27 pps to the total index, as they followed the ongoing recovery of international crude oil prices. This was partially compensated by a decrease in services prices, and those of package holidays and accommodation services in particular, down by 6.9% and 3.2% mom. Consumer durables also reported lower prices during the month, down by 0.8% mom.

The annual inflation rate accelerated to 0.8% yoy in March. The increase in services price gained speed at 2.8% yoy, whilst the negative contribution of energy contracted substantially. The decrease in prices of transport fuels shrank to 2.4% yoy, being 11.8% yoy in the previous month, while the increase in crude oil prices in March reached almost 84% yoy in BGN. Core inflation was 1.4% yoy, remaining unchanged from the previous month.

Source: Ministry of Finance