Credit growth at the end of 2007 reached a record height for the past five years at 63.7 per cent, data from the Bulgarian National Bank (BNB) showed. Total volume of credits was close to 37 billion leva, or 67 per cent of GDP of the country, Dnevnik daily said.

Average credit growth in the EU was around 30 per cent.

For the first time the growth in corporate credit was higher than that in household credits, 71.5 per cent and 52.2 per cent respectively on-the-year.

"A credit growth of more than 60 per cent is not stable and raises questions about the quality of the credits," Frederico Gitoni, responsible for regional business development in Central and Eastern Europe at Unicredit, told Dnevnik. The problem is not in the percentage or the absolute value, but quality of risk management at such a high growth, Levon Hampartzoumian, head of the Association of Banks in Bulgaria said.

The figures showed that the growth started immediately after the BNB removed limits on credits at the beginning of 2007. The limits had been put in place in 2004 at the insistence of the International Monetary Fund (IMF) when household credits exceeded an 80 per cent growth in 2003. The measures calmed the market down to level of 32 per cent growth by the end of 2005 and 24 per cent at the end of 2006.
After the limitations had been lifted, growth spurted again, which prompted BNB to increase the required minimal reserves for banks in September 2007, Dnevnik daily said.

According to Hampartzoumian, the a healthy credit growth for the Bulgarian economy would be between 25 and 30 per cent. Exceptions to this could be sectors like construction and real estate, which grew faster, he said, but the current growth was very high.