site.btaCentral Bank Reports on Its 2023 Activity

Bulgarian National Bank (BNB) Governor Dimitar Radev Friday submitted to the National Assembly BNB's Annual Report for 2023, the Central Bank said. In 2023, Bulgaria's real GDP growth amounted to 1.8%, with private consumption and net exports being the main positive contributors, the report published on BNB's website noted.

Household consumption rose by 5.4% and was underpinned by real wage growth, an increase in the number of employees and improving sentiment. Increasing net fiscal transfers to households and rising credit activity further boosted private consumption growth. Compensation per employee rose by 13.3% in nominal terms (4.4% in real terms), boosted by rising economic activity, labour shortages, public sector wage growth and an increase in the minimum wage, the report said.

Inflation, as measured by the Harmonized Index of Consumer Prices, declined from 14.3% at the end of 2022 to 5% in December 2023, mainly as a result of the high base rate of consumer price increases in 2022 and cheaper energy products. Factors with a pro-inflationary impact continued to be the high growth rates of private consumption and unit labour costs, which were influential in keeping core inflation at a relatively high level. 

In 2023, the budget balance under the Consolidated Fiscal Programme was negative at minus BGN 5,619 million (3.1% of GDP). Deposits in the fiscal reserve decreased by BGN 1,250 million compared to the end of 2022 and amounted to BGN 10,880 million (5.9% of GDP), of which BGN 10,183 million were deposits with the BNB. Positive external debt financing of the budget and negative net financing with government securities issued on the domestic market were realised during the year, the report added.

The BNB recommended that credit institutions adhere to a conservative policy in conducting their loan activities, to timely and adequate provisioning and to capital planning that takes into account the evolution of risks in the economic environment.