The emergency epidemic situation in the country, introduced due to the outbreak of the COVID-19 pandemic, was extended until 30 November 2021. Bulgaria is currently in a severe fourth wave of newly registered infections. As a response, all mass events have been suspended, and visits to restaurants and large non-food retail stores in the country have been limited to holders of a green certificate. The vaccination rate is still relatively low compared to other EU countries, with just over 20% of the population fully vaccinated by mid-October. However, after the introduction of green certificates, a significant increase in the daily number of newly vaccinated was reported.
▌ Gross Domestic Product – revised data
On 18 October, the National Statistical Institute published revised GDP data. The revision in nominal values covered the 2010-2020 period, with the most pronounced corrections in 2020 data. The nominal GDP value for 2020 was increased by BGN 1.3 bn, and the real decline was changed from 4.2% to 4.4%. For the first half of 2021, GDP growth over the corresponding period of 2020 was revised from 3.1 to 3.4%.
▌ Short-term Business Statistics
In August, most of the short-term indicators improved. Industrial production increased by 12.5% driven by electricity, gas, steam and air conditioning supply, manufacture of food products and manufacture of machinery and equipment. The growth of the industrial turnover reached 36.7%, with main contribution from domestic market turnover. Behind its dynamics was electricity, gas, steam and air conditioning supply. The growth of the export turnover was driven by manufacture of basic metals. The construction production index increased by 5.2% after declining in July. The growth of the turnover in retail trade slowed down to 12%, and a decrease in the sales of textiles, clothing and footwear was reported.
In September, а worsening in the survey indicators has been witnessed. The business climate indicator declined by 2.4 points due to more unfavourable assessments for both the current and the future business situation of enterprises in construction and retail trade. Around 40% of the respondents in construction declared the cost of materials as a problem for the development of the sector. Consumer confidence declined by 1.5 points due to more reserved expectations for the economic situation.
▌ Labour market
The number of registered unemployed continued to decline during the summer months of 2021. It stood at 154 936 at the end of September, thus being by more than 10% lower as compared to its volumes observed before the pandemic (September 2019). Given that the number of registered unemployed usually starts to increase in the autumn and winter months (due to the decline in seasonal employment) this value of the indicator is likely to be the lowest observed since the beginning of 1992. The shortterm programmes for employment preservation during the pandemic, which have been extended until the end of 2021, will continue to contribute to keeping the number of unemployed at relatively low levels.
▌ Inflation
The monthly inflation according to HICP in September was 0.2%. Higher prices of food products and particularly processed food (1.1%) had the largest contribution to the increase in the headline rate. Energy also reported higher prices compared to the previous month, up by 1%, with a contribution of the ongoing increase in prices of central gas supply (up 12.1% mom). There was also a minor increase in prices of alcoholic beverages and tobacco products (up 0.4%) and non-energy industrial goods (up 0.2%). The positive contribution of these HICP subcomponents was largely offset by a decrease in prices of services, down by 1.2% mom, which was driven by lower prices of accommodation services (-12.7%), transport (-4.0%) and communications (-0.5%).
The annual inflation rate accelerated significantly to 4.0% in September. This was due to services prices, which rose by 2.4% yoy, after a 0.5% yoy decline in August. Their dynamics also stood behind the acceleration of core inflation by 1.5 pps up to 2.2% yoy in September. Energy prices, up by 16% yoy, continued posting the highest yoy increase among the other HICP components and contributed for half of the annual increase in the headline rate. Prices of transport fuels, up by 28.2% yoy, kept their highest contribution; however, the other energy subcomponents of the HICP also posted acceleration in the recent months. This holds true in particular for central gas supply (91.7%), heat energy (13.6%) and electricity (4.4%), whose prices are administered by the state energy regulator. Energy prices dynamics in Bulgaria is in line with the upward trend of all energy goods prices in the entire European Union.