Macro: COVID-19 Update Bulgaria: More positive economic developments than expected

COVID-19 development: The spread of COVID-19 has, more or less, calmed down in recent weeks. After numbers of just under 300 newly infected per day in the middle of July, currently they vary around an average of 150 per day. Of course, after the start of the schools and universities and against the background of ongoing protests, it is likely to escalate again in the autumn.
Economic development: The dynamics of the Bulgarian economy until June 2020 (H1), under the influence of the lasting COVID-19 pandemic, showed a slightly more positive picture than expected. Thus, according to the latest available data of the National Statistical Institute (NSI), in the first half of 2020 the dynamics of the GDP, was expectedly negative, however, less negative at -4.2% yoy than had been considered.
Inflation: inflation outlined a moderately declining tendency to 2.7% ann. avg. yoy, as of June.
Fiscal policy implications: Despite the lasting state budget surplus (BGN 1.7 bn) and significant funds in the fiscal reserve the government issued Eurobonds amounting to EUR 2.5 bn. This step is understandable only in the context of the political situation in the country

This Research was produced and first published by Raiffeisen Bank International AG which is supervised by the Austrian Financial Market Authority and the National Bank of Austria.