Bulgaria's balance of payments gap narrowed 43 per cent in just a month to 449 million euro as at the end of September 2010. It was 790 million euro a month earlier, according to central Bulgarian National Bank statistics.

The contraction in September's balance deficit was because of the surpluses in the country's financial and current accounts, which were 465 million euro and 303 million euro, respectively.

The positive balance in the financial account was attributed to the increase of 670 million euro in non-resident deposits, accounting for about two per cent of Bulgaria's gross domestic product.

The current account had a surplus of 303.1 million euro in September 2010 against a deficit of 63 million euro in September 2009. The surplus came from transfers by Bulgarians abroad and earnings from foreign tourists.

Following the strong growth in exports however, which sufficiently outstripped the increase in imports, the trade deficit shrank threefold in September 2010 from 278 million euro in the same period of the previous year.

The country's current account has accumulated a surplus of 538.6 million euro since the beginning of 2010, equalling 1.5 per cent of GDP, compared with a 2.539 billion euro gap a year earlier, or 7.2 per cent of GDP.

The favourable trend in the country's current account is deemed encouraging when it comes to the inflow of foreign investments to Bulgaria on account of services, but at the same time the contraction trade hints at declining consumption and deteriorating investment activity.

Before the financial crisis started, the current account deficit was nearly 22 per cent of GDP, but was almost completely covered by foreign direct investments. Meanwhile, the current drop in investment is offset by the shrinking current account gap, which is considered negative since it brought recession and stalled economic recovery.


Source: Dnevnik.bg