The consumer price index in Bulgaria for the period from January to April has increased by over 15% on an annual basis, and the growth in food and soft drinks prices alone reached over 20%. At the same time, the observed inflationary tensions and energy shock will mainly affect closed-loop businesses and energy-intensive sectors, with varying intensities between regions. This is the forecast of the experts of the credit risk company Coface, assessing the economic situation in Bulgaria in the first four months of this year based on the impact of the military conflict in the East on various sectors in the country and Europe. In April, the inflation in the country reached 14%, as in some components the prices of transport increased by 2.6%, of housing - by 2.71%, of food and beverages - by 6.73%, and of other categories - by 2.45%, calculated by the company.

The budget balance under the Consolidated Fiscal Program (CFP) as of April remains positive and amounts to BGN 882.5 million, the Ministry of Finance (MoF) announced. The amount represents 0.6% of the projected gross domestic product (GDP) and is formed by the excess of revenues over expenditures in the national budget in the amount of BGN 678.9 million and in European funds in the amount of BGN 203.7 million. Revenues, grants and donations under the CFP for April amounted to BGN 17.7 billion (31.1% of the annual estimates). Revenues increased by a little over BGN 1 billion compared to April 2021. Tax and non-tax revenues increased nominally by BGN 1.03 billion, and revenues from grants and donations (mainly grants from EU programs and funds) increased by BGN 40.9 million compared to a year earlier. The total amount of tax revenues under the CFP, incl. Revenues from social security contributions amount to over BGN 14 billion, which represents 31.1% of the tax revenues planned for the year. 

The future operator of the gas connection between Bulgaria and Greece has announced a tender for the filling of the pipeline from Komotini to Stara Zagora with technical gas, which should start on June 13. This is one of the last steps towards conducting tests before commissioning, for which all efforts are made before the already announced deadline - in September 2022. In parallel, work is being done on all aspects of completion and commercial operation of the facility. Last week, the two countries' energy regulators hastily adopted a project to certify the ICGB project company, pending approval by the European Commission for a decision. In recent weeks, work has intensified on the completion of the 12-year construction of the interconnector with Greece, so that Bulgaria can start receiving full volumes of raw materials under the supply contract from the Azerbaijani Shah Deniz II field, which are currently priced well below those on the gas exchange markets.

The New York-based blockchain company R3 opens its first R&D center in Eastern Europe in Bulgaria. The team in Sofia will work with R3 engineers in London, Dublin, New York and Singapore and will contribute knowledge and skills to the ongoing development of Corda and Conclave platforms on R3. The hub is partnering with the UK-based DLT solutions provider INDUSTRIA, which will be responsible for hiring and promoting initial jobs. Many of the new roles will be for software engineers, as well as commercial and customer-focused roles. The Bulgarian fintech ecosystem continues to grow. Despite the challenges posed by the pandemic, the total operating revenues of Bulgarian fintech companies reached a record level in 2021 of over USD 800 million. The R3-INDUSTRIA partnership aims to use the local talent pool to further expand its blockchain and confidential computing solutions. More than 400 of the world's largest financial services companies, technology companies, central banks, regulators and trade associations are building their applications on the Corda R3 platform.

Eurohold Bulgaria reports strong growth in revenues and profits in the first quarter of the year due to the consolidation of the results of its energy business, which were not presented in the first quarter of 2021. This can be seen from the consolidated report of the company for January-March. The energy business already holds a leading share of the company's revenues, but costs are also increasing, incl. for debt service for the acquisition of CEZ's business in Bulgaria last year. The holding's insurance and car businesses also performed well during the quarter, with Ukrainian insurance companies even making small profits, despite the war in the country, which started on February 24. The company's operating revenues amounted to over BGN 1.674 billion at the end of March compared to just over BGN 408 million a year earlier, or more than 4 times more due to the consolidation with the results of the energy companies from the CEZ Group, acquired in July 2021.

Alterco, a supplier of IoT products and home automation products, continued its growth in the first quarter of this year in all its markets, while investing in the further development of its business. Demand remained strong in all product categories. Sales of electricity meters are developing particularly well, having increased tenfold compared to the same period last year. In the first quarter, Alterco achieved 14.6% growth in consolidated operating revenues to BGN 17.6 million, which reflects the sale of the Asian telecommunications business in September 2021. Adjusted for the sale of Asian subsidiaries, consolidated operating income increased by 23%. Revenues from sales of goods and products amounted to BGN 17.1 million, which is an increase of 24.6%. There has been an increase in the number of employees as part of the expansion of business activities and annual employee bonuses paid earlier in 2022, as well as higher costs for external services related to the secondary listing of the company's shares in Frankfurt.

Bulgarian drug trader Sopharma Trading reported that its consolidated net profit rose to BGN 10 million in the first quarter of 2022 from BGN 4.6 million in the same period of 2021 as a result of increased revenues. Sopharma Trading's total revenues for the three months to the end of March amounted to BGN 366.6 million against BGN 325.6 million in the first quarter of last year, according to the company's interim financial report, quoted by SeeNews. The sales of products in the pharmacy network of the company formed 67.6% of the total sales of the company of BGN 364.3 million during the period under review, while the sales for hospitals were 21.85%. Sopharma Trading holds 21.9% market share of the Bulgarian pharmaceutical market in the first three months of 2022, including 19.40% share in the pharmacy segment and 29.75% in the hospital segment. The company's expenses increased by almost 11% to BGN 353.5 million in the first quarter, as the cost of goods sold increased to BGN 319.4 million from BGN 286.2 million for the corresponding period of 2021. Sopharma Trading is a unit of the Bulgarian drug manufacturer Sopharma, which has a 81.34% stake in the company at the end of March.

As of June 1, Gazprom Export is suspending supplies to the leading Danish company Ørsted, as well as to Shell Energy Europe Limited under its contracts with Germany. The reason is that the two companies did not pay in rubles for the deliveries made in April, the Russian gas supplier announced on Tuesday. Thus, Denmark joins the list of European countries for which Russia has already turned off the tap. First, at the end of April, were Bulgaria and Poland, followed by Finland, and Russian gas will not enter the Netherlands from May 31. The two new companies, which are running out of Russian gas, have told Gazprom Export that they do not intend to pay in rubles, as required by a decree of Russian President Vladimir Putin. According to the Russian Federal Customs Service, Russia exported about 1.07 billion cubic meters of natural gas to Denmark in 2021. The contract with Shell was for 1.2 billion cubic meters per year. Earlier on Tuesday, Gazprom cut off supplies to the Netherlands after the state-owned company GasTerra refused to pay in rubles.

Consumer confidence in the United States shrank in May, falling to a three-month low due to strong inflationary pressures on households. The Conference Board's index fell from 108.6 points in April to 106.4 points in May. The median forecasts of the economists surveyed by the media were for a result of 103.6 points. The data suggest that persistently high inflation, especially in categories such as food and energy, weighs on household attitudes and shrinks their incomes. This is forcing more and more Americans to save and top up their credit cards to cover their expenses. Consumers expect prices to rise 7.4% next year, while plans to buy a home, car and appliances shrank in May. "Inflation continues to dominate consumers' minds, with inflation expectations in May remaining virtually unchanged at their high levels in April," said Lynn Franco, senior director of economic indicators at the Conference Board.

The Chinese government faces a growing shortfall of cash, analysts say, as they predict an increase of debt to fill the gap. “The latest wave of Omicron and the widespread lockdowns in place since mid-March have resulted in a sharp contraction in government revenue, including land sales revenue,” Ting Lu, chief China economist at Nomura, and a team said in a report last week. They estimate a funding gap of about 6 trillion yuan ($895.52 billion) — roughly 2.5 trillion yuan in decreased revenue due to tax refunds and weaker economic production, and another 3.5 trillion yuan of lost land sales revenue. “Much of the incoming ‘stimulus measures’, be it special government bonds or incremental lending by policy banks, will be merely used to fill this funding gap,” the Nomura analysts said. It’s that 3.5 trillion yuan figure they expect will be hard to fill, and they listed several measures, from using fiscal deposits to increasing borrowing, that could be used to make up the shortfall.