Macroeconomic Forecast Bulgaria

Bulgaria's stock of gross external debt jumped 42.8% y-o-y in April, totalling EUR30.7bn, compounding existing macroeconomic imbalances. This has been driven by the increasingly leveraged position of the private sector, which accounts for 91.2% of the total debt burden. Previously, we were relatively more sanguine about Bulgaria's ability to manage its external debt liabilities, expecting a sustained yet slower rate of accumulation over our five-year forecast period. However, given the rapid acceleration in banking sector debt so far in 2008, we now strike a much more cautious tone and highlight the increasing risks to economic stability. For the time being we maintain our medium-term debt forecasts, with gross external debt expected to reach 97.4% of GDP in 2008 and likely to rise above 100% in 2010.

To read the full article, please choose one of the following options: