As from December 1, the Bulgarian National Bank increased the Base Interest Rate to 1.30%. This is the third consecutive increase in the last three months. The interest rise is to address the high inflation which in the BNB estimate will be c. 15% on annual basis at the year end. Going forward, BNB will continue to follow ECB interest rate changes and in the next months will likely raise further the BIR accordingly.
Effective Date BIR %
01.12.2022 1.30
01.11.2022 0.59
01.10.2022 0.49
01.09.2022 0.00
“Hence, in Bulgaria, the overall economy growth, investments and specifically FDIs, and deal activity in 2023 will be negatively affected. We will see a significant drop in deal-making in H1. The slowing down of the investments, exits and buy-outs will affect the various industries unevenly. Clearly, non-cyclical industries will fare better. But even they will have to accept lower valuations or wait out the storm (and many may have to bear a higher and raising cost of external financing)”, says our corporate partner Pavel Hristov.