The governor of the BNB, Dimitar Radev, submitted to the National Assembly the Annual Report of the BNB for 2023, the central bank announced.
In 2023, the growth of the real GDP of Bulgaria amounted to 1.8 percent, as the main positive contribution to it was private consumption and net exports, it is noted in the report published on the website of the BNB. Household consumption rose 5.4 percent and was supported by rising wages in real terms, an increase in the number of people in employment and improving attitudes. An increase in net fiscal transfers to households and an increase in credit activity further supported private consumption growth.
Inflation, as measured by the Harmonized Index of Consumer Prices, is noted to have declined from 14.3 percent at the end of 2022 to 5 percent in December 2023, mainly as a result of strong consumer price growth in 2022. d. high base, as well as the cheapening of energy products. Pro-inflationary factors continued to be the high growth rates of private consumption and unit labor costs, which had the effect of keeping core inflation at a relatively high level, according to the document.
At the beginning of 2023, the banking system continued to be characterized by high liquidity, a slow and weak pass-through of the effect of the European Central Bank’s monetary policy tightening on deposit and loan interest rates, especially in the household sector, and a persistent high growth of credit for households, supported both by factors on the demand side and by active supply of credit resources by banks, the BNB notes.
In 2023, the budget balance under the Consolidated Fiscal Program was negative and amounted to minus BGN 5,619 million (3.1 percent of GDP). Deposit funds in the fiscal reserve decreased by BGN 1,250 million compared to the end of 2022 and amounted to BGN 10,880 million (5.9 percent of GDP), of which BGN 10,183 million represented deposit funds in the BNB. Positive external debt financing of the budget and negative net financing with government securities issued on the domestic market was realized during the year, the report also says.
