22.12.2022
BY HOW MUCH DO REAL INCOMES DECREASE IN OUR COUNTRY?
A decline in real incomes in the third quarter of this year, reports the Ministry of Finance. Labor income in the country continues to rise at a double-digit rate, with the average wage in the economy as a whole rising nominally by 14.7% on an annual basis, according to the data from the Monthly Review of the Bulgarian Economy.
Current wage growth is accelerating compared to the previous three months of the year, which is entirely due to the public sector, while nominal wage growth in the private sector is unchanged compared to the second quarter (15.4%). In real terms, the average wage, deflated by the consumer price index, declined by a minimal 0.4% year-on-year. The highest rate of wage growth was observed in trade (17.3%), government (17.3%) and administrative and support activities (16.9%).
Monthly inflation in October was 0.6% according to the Harmonized Index of Consumer Prices, the overview also states. The increase in prices in the group of food and non-alcoholic beverages by 2.4% compared to the previous month has a leading contribution (0.55 percentage points) to the increase of the general index. To a large extent, this is due to higher prices for processed foods and to a much lesser extent for unprocessed foods.
Non-energy non-food goods also reported an increase in price - by 1.9% compared to September, and this was influenced by medicinal products, as well as the seasonal increase in the prices of clothing and shoes. Energy goods recorded a 3.6% decrease in price during the month, after lower prices were recorded both for transport fuels by 2.2% and central gas supply by 30.8%. Services also saw a minimal decrease of 0.2% mainly due to lower prices of air tickets as well as accommodation services.
The annual rate of inflation expectedly started to slow down and reached 14.8% in October. This is due to lower inflation for energy goods and a corresponding contraction of their positive contribution on an annual basis. Together with food, they continued to form about 60% of the increase in the overall index compared to the same month in 2021. Core inflation (the overall index excluding energy and unprocessed food) continued to accelerate to 13.3% on an annual basis.
The annual growth rate of credit to the private sector slowed in September for the first time since the start of 2022, reporting growth of 13.6%, down from 13.9% at the end of the previous month. This is due to the slower growth of loans to non-financial enterprises, while loans to households accelerated minimally.
Corporate loans increased by 11.4% on an annual basis, compared to growth of 12.1% at the end of August. This comes after the growth rates of medium-term loans and overdrafts were negatively affected by a base effect from their larger increases in September 2021. Loans to households increased by 15.3% year-on-year at the end of September at 15.1% at the end of the previous month, driven by the faster growth of consumer loans (13.9% against 13.5% in August). Home loans grew by 18% year-on-year, maintaining their pace from the previous month.
The weighted average interest rate on loans to non-financial enterprises and households rose by 42 basis points to 4.19%, with the main contribution to this being the rate on corporate loans (increase by 58 bps), while the price of consumer and housing loans decreased accordingly with 5 and 3 bps The average return on time deposits remained unchanged compared to August at the level of 0.63%.
