Gabriel and WCC-DB continue dialogue via media
Negotiations on forming a government are not frozen but there is no indication when they will resume, according to Mariya Gabriel, GERBs leading player in the cabinet consultations with WCC-DB.
Gabriel indicated that new conditions were needed in order for talks, stalled since recordings of WCC consultations were leaked, to continue. "Conversations can only happen if the format, composition, model, individuals, principles and trust are rethought," she said.
WCC responded to Gabriel by stating that the easiest and most constructive coalition in this parliament can be obtained with GERB. However, it is likely that GERB will have more leverage now if consultations are reset.
Company confidence is up
Company confidence grew again in May despite the economic slowdown with the biggest investment activity being recorded in the construction industry.
Monthly surveys of Bulgarian business show that the uplift of recent months is continuing. Inflation relief is tangible in manufacturing, where producer prices in April decreased substantially for the first time since late 2020. Just months ago, they were growing at double-digit rates, with inflation peaking at 20%. However, a recorded 3.5% year-on-year drop comes mainly from energy and metals mining and processing prices. .
Other sectors such as food production, beverages and clothing, still record double digit inflation but it is gradually slowing.
Minimum reserves will be higher
The increase in mandatory minimum reserves (MRR) from 10 to 12%, set a month ago by the Bulgarian National Bank, will probably not be a one-off, according to a study of the ECB's monetary policy published by the financial regulator.
The regulator indicates that levels required for banks may reach 15% by the end of the year. The study does not set a definitive figure for reserve levels but the results of a simulation of the effects of the tightening measures are given. The first two are those already announced by the BNB - equalization of the interest rate on funds borrowed from non-residents (currently 5%) with that on funds borrowed from residents (10%) from June 1 and an increase in the general rate to 12% from July 1 .