Home > Bulgaria general news, Bulgarian Economy, The Balkan > Bulgaria 2008 foreign debt growth slows to 27 pct y/y

Bulgaria 2008 foreign debt growth slows to 27 pct y/y

Bulgaria’s gross foreign debt growth slowed to 27 percent to 36.7 billion euros ($47.02 billion) at the end of December as global tighter liquidity hit private borrowing, central bank data showed on Tuesday.

The gross foreign debt, which equalled 108.4 percent of annual gross domestic product, fell by 1.7 percent in December on a monthly basis as commercial banks slowed tapping their mother companies and markets and curbed loan extension.

Bulgaria’s gross foreign debt rose 40 percent in 2007, mainly due to strong private borrowing, as commercial banks, companies and households took cheap available credits to fund high rates of investment and consumption.

The commercial banks’ debt grew 57.3 percent on an annual basis to 9.08 billion euros in December of 2008, but posted a drop of 559 million euros when compared to a month earlier.

Private debt fell 1.8 percent to 32.6 billion euros in December on a monthly basis, while public and publicly guaranteed external debt eased 0.5 percent to 4.1 billion euros at the end of December from a month earlier.

Economists have warned that Bulgaria’s high external debt and ballooning current account deficit increase its vulnerability to external shocks as the global financial crisis and economic downturn unfold, cutting investment inflows.

Analysts say the Balkan country is heading towards a hard landing as growth is expected to slow sharply to below 1-2 percent from 6 percent in 2008 and demand will plunge.

The Balkan country paid a total of 6.8 billion euros to service its gross foreign debt in 2008, up from 6.4 billion a year earlier.

The government has refrained from tapping international markets and keeps a tight fiscal policy to counter the strength of private borrowing, which analysts say has been fuelling imports and making the country exposed to external risks.

(Reporting by Irina Ivanova and Tsvetelia Ilieva; Editing by Victoria Main) ($1=.7804 Euro) Keywords: BULGARIA DEBT/

(irina.ivanova@thomsonreuters.com; +359-2-939-97-36; Reuters Messaging: irina.ivanova.reuters.com@reuters.net)


  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: