site.btaCoronavirus Crisis Forces More Companies into Bankruptcy

Sofia, August 27 (BTA) - Judging from the Registry Agency
register, the number of enterprises that were declared bankrupt
in June and July 2020 increased from the same months a year ago:
 from 42 to 62 in June and from 53 to 70 in July, the Bulgarian
Industrial Association (BIA) pointed out in an analysis entitled
 "The Economic Impact of COVID-19 in Number". The analysis is
based on public data about the second quarter of 2020 released
by various institutions and is published on the Association's
website.

The National Statistical Institute reports a rise of the
business climate composite indicator from the previous quarter,
but it is still far from the pre-crisis levels and fell 17.7 per
 cent in April, BIA points out.

The Finance Ministry finds an overall improvement of the fiscal
discipline of the budget: the arrears to central government and
to social security funds decreased, but the arrears to
municipalities increased.

State budget implementation statistics show a decline in
revenues from corporation tax in June 2020 by 18.7 per cent,
year on year, from customs duties by 9.2 per cent, from excise
duties by 10.6 per cent, and from value added tax by 6.2 per
cent. During the same period, the only tax revenue items that
increased were those from income taxes on natural persons (by
4.5 per cent), from social security contributions (by 4 per
cent), and from insurance premiums taxes (8.6 per cent). The
revenues from grants grew by 36.4 per cent, mainly thanks to the
 EU anti-crisis programmes.

The budget balance deteriorated dramatically, mainly due to a 65
 per cent decrease of the budget surplus, while, at the same
time, the surplus on EU programmes increased by 340 per cent.

The fiscal reserve shrank by 15.5 per cent, from 11.7 million to
 9.9 million leva.

April-June 2020 consumer prices dropped by 1.4 per cent from the
 first quarter of 2020 but went up by 1.6 per cent from the
second quarter of 2019. Producer prices declined, too (by 4.6
per cent): by 6.2 per cent internationally and by 3.5 per cent
domestically.

Industrial production contracted by 13 per cent from the
comparable period a year ago.

Net internal assets were down, with an increase in amounts due
from the budget, from households and from the nongovernmental
sector.

Money in circulation decreased while deposits increased, which
the BIA sees as typical crisis response.

The trade deficit expanded by 9.7 per cent from the like period
of 2019, with the shrinkage of import (11.9 per cent) exceeding
that of export (7.5 per cent).

Direct investment was stagnant at some of its lowest levels in
20 years, amounting to as little as 263 million leva in the
second quarter of 2020.

Bad and restructured loans increased. NV/LG