By the end of May, the volume of loans granted in Bulgaria already exceeded BGN 21.8 billion, with the acceleration on an annual basis of 24.45% - which is also the fastest rate of increase since 2009. For May alone, the jump was new nearly BGN 410 million, and for the third month in a row the nominal growth is over BGN 400 million, and the BGN 463 million recorded in April is an absolute record, according to the data from the monetary statistics of the BNB. The main driver of the mortgage boom remains the abundant liquidity in the sector, which keeps interest rates extremely low for both loans and deposits. At the same time, although the European Central Bank started to tighten its monetary policy a few months ago, the effects of this are practically not felt in the Bulgarian market, such as even in the corporate segment, where most of the loans are tied to the European EURIBOR index. lending growth rates remain high. In May, the statistics reported an 8.42% annual growth of company loans to a new nominal record of BGN 45.6 billion. Although for the last month alone the increase was "barely" BGN 100 million compared to over 460 in April, the trend remains upward, as from February, the annual acceleration in volumes is permanently over 8%. Another continuing trend is that of the marked growth of the overdraft, which reached BGN 16.2 billion. In parallel with the tightening of the ECB's policy, the Bulgarian regulator also tried to put a certain brake on the market, by raising the banks' mandatory minimum reserves from 10 at 12%. However, this measure failed to draw enough liquidity from the system to have a tangible effect on credit cooling. Thus, since the beginning of this year alone, the banks' mortgage portfolios have grown by BGN 1.9 billion, and for the last 12 months the increase is nearly BGN 4.3 billion. The volume of consumer financing in May grew by BGN 215.6 million and almost reached BGN 18 billion, marking yet another record value. On an annual basis, the acceleration is 13.93%, or very slightly below the 14.05% recorded in April - similar values ​​were reached about a year and a half ago, at the end of 2022, after which a slight cooling followed to about 10.5%. Overall for the banking system, the annual growth of lending for May was 13.12%, minimally below the previous reporting month's 13.13%, and the acceleration since the beginning of 2024 suggests that with a few more strong months, the levels of around 13.5%, reached in the summer of 2022. Liquidity in the system also remains high - household deposits reached BGN 82.8 billion, growing by 11.7% on an annual basis in May (11.1% growth a month earlier). In terms of business investments, growth slowed slightly to 6.7% for the last month compared to 7.4% in April, and in nominal terms the volume reached BGN 43.8 billion. In general, for the non-governmental sector, the increase in funds in banks was 9.3% for May (8.9% month earlier) to BGN 129.9 billion.

According to data from the National Statistical Institute, the highest local taxes and fees were paid in the Sofia-city region in the previous year. The highest above the intermediate rates for the country are the rates on retail trade – BGN 20 per square meter of commercial area, at approximately BGN 13 for the country. Varna region ranks second. The tax on means of transport is the highest in Burgas. The districts with the lowest taxes are Montana and Vidin, where the tax on retail trade is 3 times lower than the average for the country. Local taxes are the highest in the tourist municipality of Sozopol. Last year, NSI registered a change in the number of inhabited places in our country. In total, they are a little over 5250, with 257 towns and 4999 villages. Nearly a third of all these villages have less than 50 people, and 201 inhabited places without a single citizen. The largest part of them are located in the Veliko Oblasts Tarnovo and Gabrovo. There are 28 regions and 265 municipalities in Bulgaria. The largest region in terms of territory is Burgas, and the smallest - Sofia-city. The three largest cities in our country are also the only ones divided into districts. The capital municipality is divided into 24, Plovdiv – into 6, and Varna – into 5 districts. 1/6 of the inhabitants of the Metropolitan Municipality live in two of the districts - "Lyulin" and "Mladost", each of them numbering more than 100 thousand people. NovaTV

Pulse - a leader in the field of sports and health, acquired through a purchase and sale from Lidl Bulgaria, a 9.8-acre plot of land on "President Lincoln" Blvd. in the Ovcha Kupel district of the city of Sofia. The new complex is expected to open its doors in 2025. The project envisages the construction of the largest club in the chain - a 5-story building with a total area of ​​6,500 square meters. The new club from the chain of will contribute to the development of the area by offering the residents of Ovcha Kuchel district and the surrounding area the highest quality service for sports and relaxation. The complex will have a parking lot with a capacity of over 400 places, which will ensure maximum convenience for visitors. The new club will have a swimming pool, a luxurious spa center with relaxation areas, an innovative and spacious CrossRX hall, a multifunctional area with modern equipment, a strength area for the development of muscle mass and strength, as well as spacious rooms for group training. According to the founder of Pulse, Pascal Doychev, the total investment amounts to BGN 14 million. The largest and most successful chain of lifestyle fitness clubs in Bulgaria now has 21 locations.

The first Chinese hotel in Sofia was opened - "Aurora Sofia", which is located at 40 "Bulgarska Morava" Street, near the two major boulevards "Todor Aleksandrov" and "Al. Stamboliyski", metro station "Oplchenska" and Mall Sofia. The hotel is three-star, boutique and aimed at business customers. It officially goes live on June 28 or 29, pending certification of categorization. The investment is approximately BGN 4.5 million, says Peyo Mayorski, manager of the hotel. The company - investor in the building - is "Tianjin Tourist". The investor company "Tianjin Tourist" has a capital of BGN 4 million. It has three Chinese owners, individuals. The majority owner is Ye Bozhan, with the other two being Jiang Jingyun and Liu Chunyung. Pejo Mayorski, who is also the chairman of the Consumer Protection Association, has been working with his Chinese partners since 2012 through the travel agency China Travel Company. Until last year, there was also Chinese participation in it - in March 2023, Liu Chunyung left China Travel Company as a partner. The Chinese investors in the hotel are engaged in various businesses in Bulgaria, mainly in agriculture and in particular produce fodder, with the production directed mainly to China. Jiang Jingyun and Liu Chunyung are partners in "Bulgaria Tianshinong Feed Co.", a company with a capital of BGN 13.8 million, which in 2016 started the construction of a feed plant in Dobrich. As of the last reporting year - 2022, the company still has minimal revenues. "Aurora Sofia" has 27 rooms with terraces and 3 family apartments. An outdoor garden, an underground parking lot, a conference hall, a lobby bar and a restaurant were also built.

Dozens of new employees are planned to be hired by myPOS in Bulgaria, with the goal of over 14 billion euros worth of transactions passing through its systems in 2024 - double-digit growth. 500 of the 700 myPOS employees in Europe work in Bulgaria. In 2023, the company increased its team by 27%. Currently, myPOS has over 45 active ads for new jobs in Bulgaria. The fintech company established in Bulgaria, which was acquired by the American investment fund Advent International, has been offering a comprehensive solution for accepting card payments for businesses in more than 35 European markets for 10 years. More than 200,000 merchants use it. Reuters sources valued the myPOS deal at around 500 million euros.

The municipal councilors in Razgrad supported the establishment of a building right in a municipal property located in the "Perister" business zone. There is a stated intention of a potential investor for the construction of a workshop for the production of electronic components. The amount of the investment is BGN 1,500,000, and the opened jobs will be no less than 12.

A private bailiff makes another attempt to sell Berkut Spa Hotel. The property includes 18 single-family houses, a sports complex with a restaurant and an indoor swimming pool. The starting price of the public sale is BGN 6,418,070.21, which is nearly BGN 400,000 less than the previous one. The owner of the property and debtor in the execution case is "Sporttur" Ltd, which is under the umbrella of "K-I Invest Holding" Ltd. There are encumbrances imposed on the hotel. It is mortgaged in the Bulgarian-American Credit Bank /BAKB/. The first attempt to sell the property was in 2019. Then the starting price was BGN 4,811,961. Five years later, the value increased many times because of the 18 buildings included. A private bailiff separately announced an auction for a dozen trucks owned by "Kaven Iradis" Ltd.

The shareholders of "Eleven Capital" JSC voted at the general meeting, which was held on June 25, a gross dividend of BGN 0.6 per share. The net dividend per share amounts to BGN 0.57. The total amount that will be paid to the shareholders amounts to almost BGN 1.4 million. The rest of the profit for 2023 in the amount of over BGN 9.3 million has been classified as retained earnings. The dividend will be paid through the investment intermediaries and "Unicredit Bulbank" JSC. The shareholders also voted to change the articles of association, according to which "Eleven Capital" becomes a perpetual company. The company was originally set up with a term that expired in early 2024 and was previously extended for two years.

"Shelley Group" JSC increased its capital from BGN 18,050,945 to BGN 18,105,559 through a public offering of 55,331 shares under conditions determined by the general meeting of shareholders on June 4. In the period between June 12 and 21, a total of 54,614 new shares from the increase of its capital in the amount of BGN 1 per share were subscribed and paid in full on the company's fundraising account. The issue value is BGN 1 per share. The annual general meeting of shareholders of "Shelly Group" accepted the proposal of the board of directors and approved a gross dividend in the amount of 0.13 euros per share. The total amount of approximately EUR 2.3 million will be distributed from retained earnings within 60 days of the date of the annual general meeting. "Shelly Group" JSC is a technological holding that engages in innovation through the development, production and distribution of high-quality products for the Internet of Things. The group consists of 6 subsidiaries and has offices in Bulgaria, Germany and Slovenia, as well as in China and the USA. Shelley's products are now in over 100 markets.

Bulgaria does not only meet the price stability criterion to become a member of the Eurozone. This is stated in the biannual Convergence Report of the European Central Bank (ECB), which reflects the readiness of each of the six EU countries that are not yet members of the eurozone to adopt the euro. With an annual average value of the harmonized index of consumer prices of 5.1 percent, Bulgaria has "an average rate of inflation well above the reference value of 3.3 percent" in the period from June 2023 to May 2024. In its report, the ECB states that reference countries in terms of inflation are Denmark (with harmonized inflation of 1.1 per cent), Belgium (1.9 per cent) and the Netherlands (2.5 per cent). Finland (with harmonized inflation of 1.9 per cent) is excluded from the reference countries due to corrections in its statistical methodology affecting the determination of electricity prices in the country. The criteria for the accession of a country from the EU to the Eurozone are, along with inflation, the level of the budget deficit, the government debt and the long-term interest rate. Two other key requirements are a minimum stay of two years in the ERM 2 exchange rate mechanism (with a maximum exchange rate change of 15 percent) and synchronization of national legislation with that regulating the functioning of the Eurosystem (the ECB and the central banks of the countries from the Eurozone). In addition to Bulgaria, the report also analyzed Poland, Romania, Hungary, the Czech Republic and Sweden. Apart from the inflation criterion, Bulgaria fulfills all other requirements, reports the ECB. Our country is the only non-member of the euro zone that achieves this, as well as the only one among the six that has currently introduced the ERM 2 mechanism.

Inflation

In May 2024, the average 12-month rate of harmonized inflation in Bulgaria was 5.1 percent, i.e. well above the reference value of 3.3 percent set as a criterion for price stability. Unit labor costs rose by 27.4 percent in the period from 2020 to 2023, well above the euro area rate of 9.5 percent. There are concerns about the sustainability of the convergence of inflation in Bulgaria (with that of the Eurozone) in the long term. The catch-up process (of income, purchasing power, etc.) is likely to lead to positive inflationary differences compared to the Eurozone, as per capita gross domestic product (GDP) and price levels are still significantly lower in Bulgaria than in the euro area. Remuneration growth must be tied to productivity growth, making the country attractive for investment. In order to attract capital, it is also necessary to fulfill "Bulgaria's commitment to further reduce corruption, ensure an independent and efficient judicial system and improve the education system", the ECB analysts note.

Level of budget deficit and government debt

At the moment, Bulgaria is not subject to a Council decision on the existence of an excessive deficit. Bulgaria's state budget deficit is 1.9 percent of GDP in 2023, i.e. well below the benchmark of 3 percent. In the period 2021-2023, the balance of public finances has improved, but reported deficits remain above those typical of the period before the COVID-19 pandemic. At the same time, the debt/GDP ratio is 23.1 percent, or also significantly below the reference value of 60 percent. By 2023, however, it had risen by 3.1 percentage points from the 2019 level, according to the ECB.

Exchange rate stability, participation in ERM 2 and the "gray list" of the Financial Action Task Force

The Bulgarian lev participates in the ERM 2 currency mechanism during the two-year reference period from June 20, 2022 to June 19, 2024. During the reference period, the lev does not show a deviation from the central rate. The report recalls that the ERM 2 participation agreement is based on a number of political commitments undertaken by the Bulgarian authorities. Bulgaria is currently working on them and our country is "encouraged to accelerate its efforts to implement the elements of the action plan that was adopted by the Financial Action Task Force (FATF) after Bulgaria was placed on the group's "grey list" for jurisdictions under enhanced money laundering surveillance in October 2023".

Level of long-term interest rates

Borrowing policy in the US has changed over the years, but we see a system in crisis - a large country, with a huge economy, with large national and international obligations, on the one hand, and on the other hand, there are inefficiencies in spending, as well as errors in governance and several major crises. This comment Andreja Stojanovic, financial reporter at FINBOLD - a platform that provides extensive coverage of news from various financial markets. A Finbold study claims that US debt has grown by $26.3 trillion. dollars for the past 15 years as US government spending has been bloated in all areas. The report examines how U.S. borrowing policy has changed over the years, beginning with Ronald Reagan's reforms. The research aims to expose entrenched inefficiencies in the system, talking about bloated government spending. Stojanovic describes US fiscal policies as insufficient due to indiscriminate spending. He reported that, according to the study, 2024 is shaping up to be the second-worst year for the US national debt, excluding crisis years. "If the current trends of the central banks are followed, we can talk about a real crisis that will require major restrictions," Andeja Stojanovic warned and explained that it is possible that there is a so-called discrepancy between the assumed value and the real value in the system. "On the other hand - and this is a bit controversial - there have been signs in the last few years that the Fed and the US Treasury Department have at least partially accepted the postulates of the modern theory of money. In this case, however, this means nothing - the debt will simply continue to grow," he adds. According to him, bankruptcy is unlikely, but the problems will most likely bring political chaos with them, which will play a significant role in the upcoming presidential elections. America's debt is different from that of many developing economies because so much of it is held by citizens, trusts, pension plans and other countries. "If we look at the history of Donald Trump's previous term, the projections are that if the Republican returns to the White House, we could see an increase in debt. According to research, the Tax Cuts and Jobs Act passed in 2017 during Trump's tenure led to a large increase in liabilities," Stojanovic reported. He believes that under a Trump presidency, if the American Tax Cuts and Jobs Act is extended or even the tax cuts become larger, more borrowing will likely be needed and the national debt will grow . Stojanovic believes there is a paradigm shift, with financial markets previously being linked to the general state of American citizens and the economy. While the concentration of wealth from the financial markets is now seen to be held by a small percentage of people, he pointed out and explained that it is this small group of extremely wealthy people who are very good at paying less tax. "The debt is rising not because taxes are not paid - quite the opposite. The population pays taxes, but then lends money to the US government, in the form of bills, bonds, etc., because the US government needs the money," he commented. One of the questions the study asks is whether the US has become a hostage to its debt can be achieved with productivity growth, extreme constraints that “will have such consequences for society that they will make them a less achievable solution.” Or it will require a new approach that the American government uses, as for a nuclear alternative, for example," added Stojanovic. He noted that the question of whether there is a need to revise the debt is already being raised, since, on the one hand, it gives leverage to the US. "A lot of international players own a piece of it and they have an interest in a well-performing American economy," Stojanovic said, citing countries like Saudi Arabia and China that stand to lose a lot if something happens to the U.S. economy. He believes that the big question remains - how the data around the obligations will be used in the election campaign.

India's age-old dream of linking its many rivers to end water crises is finally coming true. The National River Linking Project (NRLP) can solve the country's long-standing problems of floods and droughts by offering an innovative approach to redistribute water resources. India, a country of contrasts where water abundance in some regions is accompanied by severe scarcity in others, has long sought ways to equitably distribute its water resources. The NRLP is a network of approximately 3,000 reservoirs connecting 37 rivers that will divert water from excess basins to those where it is most needed. Connecting the rivers of the Himalayas with the rivers of the Arabian Sea and the Bay of Bengal represented an engineering feat that would transform the landscape of South Asia. The construction of 30 pipelines capable of carrying 200 billion cubic meters of water annually promises to support hydroelectric power generation and agricultural irrigation, making the project not only environmentally but also economically viable. despite the optimism, the project has raised concerns among scientists, who warn of potential unintended consequences, such as the impact on monsoon seasons. Tejasvi Chauhan from Germany's Max Planck Institute for Biogeochemistry emphasizes that river systems are interconnected and changes in one can lead to changes in another. The value of the project is estimated at 168 billion US dollars. The first link of the network connecting the Ken and Betwa rivers has already been approved for implementation by the Government of India. Cash.bg