Download Slide 1

BULGARIA
Country and
Financial Sector
Presentation
Main Economic Indicators
No.
INDICATOR
2003
2004
2005
2006
2007
7.80
7.76
7.72
7.62
7.57
2.3%
6.2%
5.0%
7.4%
6.2%
19.939
24.300
26.648
31.201
36.910
2,555.86
3,131.03
3,452.39
4,094.61
4,875.82
4.5%
5.7%
5.5%
5.8%
5.0%
13.5%
12.2%
10.7%
10.1%
9.3%
7 Industrial output growth (%)
8.3%
18.3%
7.3%
6.0%
5.5%
8 Remittances - Current transfers, net (USD m)
695.6
1,097.9
1,144.3
1,306.1
1,619.0
2,096.8
3,358.9
2,222.9
2,200.0
1,800.0
0.0%
1.7%
3.2%
3.2%
1.3%
11 Gross external debt / GDP (%)
67.6%
67.7%
70.5%
69.0%
60.0%
12 Trade balance / GDP (%)
-12.9%
-15.0%
-20.3%
-19.6%
-17.6%
-5.1%
-5.8%
-11.8%
-13.0%
-12.0%
6,291.01
8,776.25
8,040.54
9,757.72
11,262.74
1 Population (end-year; million)
2 Inflation rate (CPI Avg.; %)
3 GDP at current prices (USD bn)
4 GDP / capita (in crt. prices; USD)
5 Real GDP growth (%)
6 Unemployment rate (ILO definition; eop; %)
9 Direct foreign investment in the country (USD m)
10 Consolidated budget balance / GDP (%)
13 Current account / GDP (%)
14 Forex reserves (excluding gold; eop; USD m)
Developments in 2006







High growth starting with Q2
Sizable reduction in net export’s negative
contribution to GDP
Tight fiscal policy
Strong private domestic demand
High growth of gross fixed capital formation
High rate of credit growth
High Current Account Deficit
Prospects for 2007





High growth continues more broadly based
Export oriented industries fast growth
materializes in a higher growth rate for
exports than imports
Tight fiscal policy
Sustained inflationary pressure put some
pressure on the currency board
High levels of FDI
Financial Sector




Currency Board arrangement since
1987
Banking Sector dominant at 90% of
financial sector assets
Bank assets to GDP 78% at end 2005
High concentration (first 5 hold over
50% of assets)
Banking Sector





34 banks as at end 2005 (15 foreign
owned, 12 locally owned, 2 state
owned, 5 local branches of foreign
banks)
Share of bank assets owned by foreign
banks and branches 72% in 2005
Share of loans by local banks 21%
Share of deposits in local banks 13.4%
Capital adequacy ratio > 12%
Banking sector (cont.)






Deposit Insurance Fund
Credit registry
Declining interest rates and spreads
Increased volume of MLT loans
Good ratio of non-performing loans to
total assets (2.2%) but increasing
since 2004
Responsible for >25% of private
foreign debt
Banking Sector (cont.)





Since 2001 high credit growth
Bank credit to non-government sector
increased from 4% of GDP in 1998 to 12%
at end 2004 (still low)
In 2005 BNB introduced quantitative limits
on credit growth
Consequently increase in non-bank financial
intermediation (including cross-border
lending)
Restrictions to be removed in 2007
Capital Markets





Still low turnover in the Stock
Exchange
Market capitalization < 10% of GDP
Rapid growth in the market index
Private pensions picking up at 2% of
GDP
Gross premium income of all insurance
2.5% of GDP
Thank You