In Bulgaria CA surplus rebounds to EUR116m in November

The CA surplus rebounded to EUR116.0m in November from the EUR359.7m deficit in Nov 2015, according to the latest data released by the central bank (BNB). A sharp increase in secondary income as well as an improving trade deficit were mainly behind the improving CA position. In particular, the secondary income posted net EUR184.7m inflow, which reflected increased EU fund transfers. The trade balance also improved y/y as total exports picked up to a 14.9% y/y growth while imports continued to contract, in our opinion on account of favorable terms of trade effects. Net primary income outflows also declined y/y in November on account of lower repatriated profits and lower debt servicing burden. These developments compensated an EUR 105mn fall in the services trade surplus largely on account of lower exports of transport services. Tourist services maintained strong growth of 25.7% y/y in November.

The capital account transfers fell to EUR 24.5mn, down by 121% y/y mainly on the back of a pause of EU funds absorption. The financial account posted net inflows of EUR18.8m, excluding the change in reserves. Net portfolio investment outflows were high due to increase in residents’ investments abroad. Other investments posted net inflows of EUR227.5m representing local banks’ recovering their deposits abroad. Net errors and omissions were positive at EUR171.0m.

Bulgaria’s forex reserves increased by EUR302.4m in November after EUR177.6m fall in October.

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