Bulgaria’s CA surplus rose by 46.2% y/y to EUR621.2m in August, according to data by the Bulgarian National Bank (BNB) published yesterday. The cumulative surplus was EUR 1.9bn in Jan-Aug up by 137.7% y/y. On a twelve-month rolling basis, the current account surplus represented 2.8% of GDP in August, which is a historically high record level.
The CA surplus improved y/y in August despite a widening merchandise trade deficit. The trade deficit increased to EUR174.2m but the rise was offset by growing net primary income and services surpluses. We believe that the larger trade deficit in August was largely on account of recovering crude oil prices, which boosted imports, and this effect should continue to be felt in September. Total imports rose by 18.5% y/y in August while the export expansion was more subdued at 10.7% y/y. The services balance was supported by a strong tourist season.
The net financial account outflows reached EUR825.1m in August. The outflows were mainly in the form of local banks exporting deposits abroad as well as large repayments of external debt by non-profit institutions serving households.