10.07.2012

ECOFIN formally closed the excessive deficit procedure for Bulgaria at its meeting on June 22, thus confirming that the country has reduced its deficits below the EU\'s reference value. Furthermore, on July 2, Bulgaria successfully issued a new 5Y benchmark Eurobond at the amount of EUR 950 mln and a coupon rate of 4.25%, as the extremely strong investor interest amounted to over EUR 6 bn of orders. The strong investor response and robust participation in this transaction proved Bulgaria\'s credit strengths, as evidenced by its solid macroeconomic performance and remarkable progress achieved in terms of fiscal consolidation and financial stability.

Meanwhile, preliminary data on GDP confirmed dynamics from the flash estimates. Bulgarian economy expanded by 0.5% yoy in Q1 2012, while remaining flat qoq. High-frequency economic data showed somewhat favorable developments, the unemployment rate also decreased further to 11% in April. In the first five months, consolidated budget balance recorded a 0.1% of GDP surplus on a cash basis, thus the cumulative budget stance stood positive for the first time since June 2009.

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