Bulgaria’s current account deficit grew by 69 per cent to 3.2 billion euro, or 12 per cent of the forecasted gross domestic product (GDP), in the first eight months of 2007, compared to 1.9 billion euro, or 7.5 per cent of GDP in 2006, the Bulgarian National Bank (BNB) said, as quoted by Dnevnik daily on October 16.

The main driving force behind the considerable current account gap increase was Bulgaria’s negative trade balance. For the period ending on August 31, Bulgaria imported goods and services worth 4.47 billion euro more than it exported, which represented a 16.7 per cent share of GDP.
The country’s export of goods grew by 8.3 per cent on an annual basis to reach 8.53 billion euro, while the import was on the rise with 17.3 per cent to 13 billion euro. Meanwhile, Bulgaria’s services balance was on the positive side, reaching 1.13 billion euro for the first eight months of 2007, compared to 854.7 million euro for the corresponding period of 2006, BNB said.

In August alone, the deficit was 160.7 million euro from 86.8 million euro in the same month of 2006.
Foreign direct investment rose to 3.4 billion euro in January-August 2007, up from 2.8 billion euro a year earlier, and covered 106 per cent of the current account gap.

The Government expects the current account gap to widen to around 20 per cent of GDP by the end of 2007.  Bulgaria was keeping one of the tightest fiscal policies in Europe, targeting a budget surplus of around 2.5-3 per cent of GDP this year and a similar surplus in 2008, Dnevnik said.