Bulgaria’s external debt rises to nearly €45.1 billion, exceeding 49.9% of GDP

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According to a recent report by the Bulgarian National Bank (BNB), the gross external debt at the end of January 2023 reached almost 45.1 billion euros, which represents 49.9 percent of the estimated Gross Domestic Product (GDP). This figure is almost 3.963 billion euros higher than at the end of January 2022, when it stood at over 41.120 billion euros, equivalent to 48.6 percent of GDP.

Debt accounts for almost half of GDP

The report further revealed that long-term liabilities accounted for almost 36.9 billion euros or 81.8 percent of gross debt and 40.8 percent of GDP. This represents an increase of nearly 2.6 billion euros or 7.4 percent compared to the end of January 2022.

Regarding the external debt of the “State Government” sector, it stood at 10,108.1 million euros, representing 11.2 percent of GDP at the end of January 2023. This is an increase of more than 1.888 billion euros or 23 percent compared to the same period in 2022.

The Central Bank’s external liabilities amounted to over 2 billion euros or 2.2 percent of GDP, increasing by 95.6 million euros on an annual basis. Meanwhile, the external liabilities of the “Other monetary financial institutions” sector amounted to 6.06 billion euros or 6.7 percent of GDP, representing an increase of almost 1.174 billion euros or 24 percent compared to the end of January 2022.

The external liabilities of “Other sectors” reached almost 12.628 billion euros or 14 percent of GDP, which is an increase of 215.8 million euros or 1.7 percent compared to the same period last year.

Intra-company lending stood at almost 14,263 billion euros or 15.8 percent of GDP, which is an increase of 589.4 million euros or 4.3 percent compared to the end of January 2022. This lending traditionally accounts for the most significant share in the external debt structure, representing 31.6 percent at the end of January 2023, compared to 33.3 percent a year earlier.

Concern for economic stability

Bulgaria’s external debt is a matter of concern as it may impact the country’s economic growth and stability. The increase in external debt may lead to a decline in investor confidence, which could result in a decrease in foreign investment, a rise in interest rates, and a depreciation of the national currency.

On the other hand, external debt may be necessary to finance investments and growth, such as infrastructure projects or expanding businesses. However, excessive external debt can become a burden on the country’s economy, particularly if the country experiences economic difficulties or if there is a sudden change in external market conditions.


It is essential to monitor external debt levels and manage them effectively to maintain economic stability and growth. The government can consider several strategies to manage external debt, including:

Increasing exports: By increasing exports, the country can earn more foreign currency, which can be used to pay off external debt.

Encouraging foreign investment: Foreign investment can provide the country with a source of foreign currency, which can be used to pay off external debt. Attracting foreign investment can be achieved by offering incentives to investors and creating a favorable business environment.

Reducing government spending: The government can reduce its spending to free up funds to pay off external debt. This can be achieved by cutting unnecessary expenses and increasing efficiency in public spending.

Diversifying the economy: Diversifying the economy can reduce the country’s reliance on a single sector or product and reduce the impact of external market conditions on the economy.

Bulgaria’s external debt has increased significantly in the past year, raising concerns about the country’s economic stability and growth. It is crucial to manage external debt levels effectively to avoid negative consequences such as investor confidence decline, rising interest rates, and currency depreciation.

The Bulgarian government can consider several strategies to manage external debt, including increasing exports, encouraging foreign investment, reducing government spending, and diversifying the economy. By adopting these strategies, Bulgaria can maintain economic stability and growth, which is essential for the country’s prosperity.

The government may also take proactive steps to monitor external debt levels and implement policies to address any issues that may arise. By taking a proactive approach to managing external debt, Bulgaria can ensure long-term economic growth and stability while avoiding any negative consequences that may arise from excessive external debt levels.

Dan Novick

Dan Novick is an economist and Balkans correspondent for GE63. With a focus on the economic and political developments in the Balkans, Novick offers insightful analysis and commentary on the region's growth, challenges, and opportunities.

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