ECONOMY

Bulgaria’s foreign debt up 31 pct in end September annually

SOFIA – Bulgaria’s gross foreign debt rose by 31 percent on an annual basis to 24.9 billion euros at the end of September due to buoyant private borrowing, the country’s central bank data have shown. The external debt of the European Union newcomer reached 93.2 percent of GDP in the first nine months, up from 75.7 percent of GDP in the same period a year earlier. Bulgaria paid -4.48 billion to service its gross foreign debt from January to September, up from -3.04 billion a year earlier. Private foreign debt surged 45 percent to -20.9 billion, or 78.1 percent of GDP, as banks, companies and households borrowed from abroad to fund rampant consumption and high rates of investment in the emerging economy. The central bank raised as of September the banks’ minimum reserve requirements on deposits to 12 percent, from 8 percent previously, in an attempt to dampen liquidity and to curb the strong credit growth. Public and publicly guaranteed external debt dropped 12 percent to -4.04 billion at the end of September on an annual basis. This is mostly attributed to the government’s repayment of some of its global bonds that matured and its entire debt to the International Monetary Fund.