Monday was a day of forecasts - today the Bulgarian National Bank and the World Bank lowered their expectations for Bulgaria's economy. On the other hand, predicting the coalition's future is definitely harder. Lyubomir Karimanski is now the only candidate for governor of BNB and this week Parliament should either choose him (with the support of GERB and MRF) or come up with a new, compromise candidate.
Karimanski: the only candidate for BNB governor
One of the two candidates for governor of BNB - Andrey Gurov (from the ruling party WCC), has withdrawn from the race. The reason, he explained in a Facebook post on Sunday, is that he would not have majority parliamentary support for his candidature. Gyurov's decision comes against the background of public calls (notably from Hristo Ivanov, co-chairman of Democratic Bulgaria) for the withdrawal of the two candidatures - Gyurov's and also Lyubomir Karimanski's from TISP, the party headed by Slavi Trifonov. The decision could prove contentious and possibly even break up the coalition as Mr. Trifonov's party is looking for support from the opposition GERB and MRF parties and this means they would have the final say.
"In the absence of coalition support, let my opponent decide for himself whether he wants to leave this important and responsible decision in the hands of the opposition. This is, after all, an ethical choice, part of the requirement for the head of the BNB to have high morals and a good name," wrote Gyurov in his Facebook post.
BNB lowers 2022 GDP forecast to 2.1%
Bulgaria's GDP growth will slow to 2.1% in 2022, the Central Bank said, lowering its previous forecast for a 3.6% rise. One reason is the Russian war on Ukraine, which led to a sharp spike in uncertainty and inflation in Bulgaria, BNB noted. The other general reason is the projected slowdown in private consumption growth and an increase in the negative contribution of net exports. In 2021, Bulgaria's GDP increased by 4.2% year-on-year, according to data published by NSI.
The World Bank also lowered its forecast for Bulgaria's GDP in its spring report. Instead of 3.8% GDP growth, the new expectations are for 2.6%.
New auction, new luck
The state succeeded in raising 500 million levs in debt and sold 3.5-year government securities at an auction on Monday with a yield of 0.88%. Just a week ago, the Finance Ministry failed an auction for the same amount, but with longer-term securities due to a lack of interest.