Foreign direct investments in Bulgaria have marked a record growth during the past year, statistics showed. They exceeded 1.5 billion euro. Meanwhile, the Bulgarian National Bank reported about a record outflow of capital from the country in 2015, reaching the level of 3.3 billion euro. At the backdrop of these data, the balance of payments of this country is allegedly positive and experts claim surplus reaches 165.5 million euros.

The seeming contradiction actually shows other processes.

If the balance of payments was positive despite the increased outflow of money from the country, then this outflow was compensated by additional revenues. Additional revenues can only come from exports, which are constantly growing. This is a sign that the Bulgarian economy has been developing well and this fact is also recognized by foreign partners. Further evidence that the Bulgarian economy has been successful is the fact that it was possible for over 3 billion euro to leave this country without causing any shocks. Moreover, this money came from the successful business of subsidiaries of large western companies operating in the country and it also reduces intercompany indebtedness. Indebtedness was one of the main dangers for Bulgarian business highlighted in the latest report by the European Commission on the development of Bulgarian economy. The sharp decline in intercompany lending, amounted to 2.5 billion euro, the BNB reported in July 2015. This means that this was the sum Bulgarian companies paid to parent companies and other foreign creditors. For the period January 2015 - January 2016 banks in Bulgaria, the majority of them owned by foreign financial institutions, have transferred 1.3 billion euros to parent companies abroad. The reason again is that they register huge profits and excess liquidity, while at the same time there are no good enough local projects in which they could invest their money. External indebtedness of Bulgarian business has significantly declined and according to observers, this decline reaches nearly 3 percent. However, debts remain big and equal almost a quarter of the GDP of the country. One should keep in mind that the most indebted companies in Bulgaria are foreign ones and a significant part of these debts are internal company loans. One structure or group providing a loan to another is a common practice that does not bother anyone except the very management of the corporations.

Otherwise, government finance and accounts are in good condition and the balance between revenue and expenditure at a national level is carefully monitored and maintained at a good level, even at the cost of moderate external borrowing.

English: Alexander Markov