The Governing Council of the BNB set the level of the countercyclical capital buffer applicable to credit risk exposures in the Republic of Bulgaria at the rate of 1% for the third quarter of 2020. When determining the level of the countercyclical buffer, both the reference indicator and the relevant European Systemic Risk Board (ESRB) guidelines, as well as other indicators that the BNB has judged to be appropriate to reflect cyclical systemic risk, are taken into account. At the end of the first quarter of 2019, the calculated credit-to-GDP ratio on the website of the Bulgarian National Bank amounted to 95.7%. Long-term trend deviation is negative (-42.3 percentage points), which corresponds to a zero value for the reference for the countercyclical buffer. Trends from previous quarters for increased activity on the credit market in the country remain. In times of enhanced lending, it is possible to start gradually accumulating cyclical risks that would arise if the ability of borrowers to service obligations weakened in the event of a possible downturn in economic activity and an increase in risk premiums included in interest rates.

Bulgaria plans to use 1.61 per cent of its gross domestic product for defense. That's USD 927 million for 2019. The rise is 0.3 percentage points compared to 2014, when Sofia spent USD 638 million or 1.31% of GDP. In NATO the US spends the largest share of GDP for defense - over 3.42%. Luxembourg is last with 0.55%, as it has the highest GDP per capita in the EU - EUR 66,000. Montenegro allocates a little more money than Bulgaria as a percentage of its GDP - 1.65%. Defense spending has risen steadily over the past 5 years. More and more countries are close to reaching the target of 2% of GDP for defense, NATO Secretary-General Jens Stoltenberg said.

Acquisition of CEZ's assets in Bulgaria is the first step of Eurohold Bulgaria in the energy business, but it certainly will not be the last one. The biggest public holding in the country has set the goal of building a group of energy companies in the Balkans, with which to become a serious regional player in the sector. The news was revealed by three of the leading figures in the holding - Asen Hristov, Kiril Boshov and Vasil Stefanov. "We have no intention of limiting ourselves to Bulgaria alone, if other energy distribution companies are sold in the region, we would be happy to participate in consolidating a regional holding company around the Bulgarian company, which would be beneficial to everyone," said the chairman of the Supervisory Board of Eurohold Asen Hristov. Eurohold has already signed a contract for the purchase of CEZ for EUR 335 mln, and the holding will also cover the debts of the acquired companies. It expects to obtain the necessary regulatory approvals from the CPC and the EWRC in the coming months and the purchase will be completed by the end of 2019.

Coca-Cola European Partners opened а new financial services center in Bulgaria. It is located in Varna and will employ over 90 people who will carry out a wide range of financial services. Thus, the company expands its already existing office in Sofia, which has been operating since 2013 and has nearly 800 employees. Coca-Cola Europe Partners bottles for 13 countries in Western Europe, and although it does not bottle or sell products in Bulgaria, it develops its own shared financial services center, just like Coca-Cola Hellenic Bottling Company, which is the bottling company for Bulgaria and the region. Currently, six separate Coca-Cola companies operate in Bulgaria, providing 40% of the jobs in the soft drinks industry in Bulgaria. Currently, the overall contribution of the Coca-Cola system in Bulgaria amounts to 0.6% of the country's Gross Domestic Product. With a total of 19,800 jobs, it holds 0.7% of the labor market in the country (not including the newly opened office in Varna).

The German company Linder has begun building Lozen Residential Park - a large gated residential complex in Sofia. At the first stage, the investor plans to invest BGN 80 million in the construction of 136 one-family, two-family and row houses, a public area with a school, a kindergarten, an office building with shops and a sports hall. The main contractor of the project is Lindner Bulgaria, and the design was done by Ivo Petrov Architects. The terrain for the first stage is 77 decares in the land of the village of Lozen, on the border with the land of the village of German. Construction is expected to last for three years and the first phase to be completed in 2022. The whole building will occupy a surface of 230 dc, and the expected area will be 80 000 cubic meters. The company has a total of 300 decares in the area. The total investment of Lindner in Lozen Residential Park is expected to reach BGN 300 million. The construction and operation of the new project will create about 500 jobs. Stage 1 housing units have already been contracted by 90%, said the manager of Lindner Immobilien Management and Lozen Residential Park. Prices start at EUR 200,000 for row houses and reach EUR 700,000 for the largest.

The energy regulator is about to approve a 0.6% reduction in gas from July 1. The Energy and Water Regulatory Commission has already agreed with the accounts of the state-owned Bulgargaz, and an open session was held yesterday. Thus, the proposed price for the third quarter of 2019 will be 44.90 BGN per megawatt hour (excluding access, transit, excise and VAT rates). However, if there is a new gas depreciation, it will also affect the prices of heating and hot water. In the coming days, the regulator will decide on the prices of electricity, steam and gas. The new prices will come into force on July 1st.

Bulgarian car battery maker Monbat said that its consolidated profit before taxes soared by 186.7% on the year to BGN 8.72 million in the first five months of 2019. The company’s consolidated net sales revenue rose by 23.6% year-on-year to BGN 137.63 million in January-May. Monbat’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by an annual 51.7% to BGN 17.0 million in the period under review. In May alone, Monbat generated a pre-tax profit of BGN 619,000, 50.20% lower compared to the same month of 2018. Net sales revenue increased by an annual 3.6% to BGN 26.6 million, whereas EBITDA more dropped 21.5% to BGN 2.3 million.

The Council of Ministers approved the EU-Vietnam trade and investment agreements, paving the way for their signature and conclusion. EU Commissioner for Trade Cecilia Malmström and Romanian Minister for Business, Trade and Entrepreneurship Ștefan-Radu Oprea will sign the agreement on the EU's behalf in Hanoi on Sunday 30 June. The agreements are set to bring unprecedented benefits for European and Vietnamese companies, consumers and workers, while promoting respect for labour rights, environmental protection and the fight against climate change under the Paris Agreement. The trade agreement will eliminate nearly all customs duties on goods traded between the two sides in a progressive way that fully respects Vietnam's development needs. The agreement also contains specific provisions to remove technical obstacles, such as those in the car sector, and will ensure that 169 traditional European food and drink products recognised as Geographical Indications are protected in Vietnam.

U.S. parcel delivery firm FedEx Corp sued the U.S. government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese companies. The move came after FedEx reignited Chinese ire over its business practices when a package containing a Huawei phone sent to the United States was returned last week to its sender in Britain, in what FedEx said was an "operational error." FedEx's suit and delivery error come against a backdrop of increasing tension between the world's two biggest economies. The United States and China have been engaged in a trade fight for nearly a year on issues such as tariffs, subsidies, technology, regulations and cyber security. The U.S. Commerce Department has banned a number of Chinese firms in recent weeks from buying sensitive U.S. technology. In court filings in the District of Columbia, FedEx said it should not be expected to enforce the export ban, and could not reasonably be held liable for shipping products that it did not know about.

China issued a white paper on financial services provided for small and medium-sized enterprises (SMEs). As a major source of new growth drivers, SMEs have played an important role in promoting economic growth, increasing jobs and stimulating innovation, says the white paper released by authorities including the People's Bank of China and the China Banking and Insurance Regulatory Commission. By strengthening counter-cyclical adjustments, keeping the liquidity at a reasonable and ample level, and comprehensively utilizing credit, bonds and equity, China has effectively alleviated the financing difficulty facing SMEs. China's capacity of providing financial services for the SMEs has seen remarkable improvement, with the credit supply constantly increased, financing cost steadily lowered and financial coverage widened. By the end of 2018, nationwide outstanding inclusive loans to SMEs reached 8 trillion yuan (about 1.12 trillion U.S. dollars), up 18 percent year-on-year and 8.2 percentage points faster than the growth at the end of the year before.