The expectations are that the households will be more confident in using their savings to finance larger consumer expenditures;

The planned asset quality review and the ensuing increase of the credit standards will be a return to normality for the sector.

The increase of foreign capital in the country is the key to economic growth. This was said by Levon Hampartzoumian, Chief Executive Officer of UniCredit Bulbank, at the Bank & Business conference organized by Capital newspaper. At the same time, faster growth next year is expected to be facilitated mainly by individual consumption. This conclusion was made by Kristofor Pavlov, chief economist of UniCredit Bulbank.

The growth of the individual consumption is expected to reach 2.3% next year, against 1.3% in the current year. According to Kristofor Pavlov, the households, even if moderately, will be willing to increase the loans, and will be more confident in using part of their savings to finance greater consumer expenditures next year.

"The main reason for the optimism with regard to the households is that the people are becoming less insecure about their jobs, as the economy created 46 thousand jobs in 2014 and is about to create 45 thousand more in 2015. Significant part of them are in the sectors with the highest average wages, namely IT, communications and business services", UCB's chief economist explained.

The economic team of UniCredit Bulbank expects a real GDP growth by 2.8% this year and growth up to 3% in 2016. This will be accompanied with certain improvement in the structure of GDP growth. The components of domestic demand will play a greater role with regard to the growth which, until recently, used to rely almost entirely on the export of goods and services.

The external environment, too, will remain favourable in 2016. Among the factors for this are the continuing easing of the monetary conditions in the eurozone and the higher economic growth in the developed economies, mostly those from the European Union, which are among the most important export markets for the Bulgarian economy. The export is expected to grow further by 3.4% in real terms next year.

"The investments in the country are likely to register an increase by 4% in 2016, and the decrease in the capital expenditures of the government will almost entirely be compensated by an increase of those of the private sector", Kristofor Pavlov added.

As regards the expectations for 2016 for development of the banks in Bulgaria, Levon Hampartzoumian summarized that the planned asset quality review and the ensuing increase of the credit standards would be a return to normality for the sector.

More information for media:

UniCredit Bulbank, Identity & Communications Department

Viktoria Blajeva, Phone: + 359 2 9264 993, wjlj/ebwjepwbAvojdsfejuhspvq/ch

Magdalena Ivanova, Phone: + 359 2 9232 528, nbhebmfob/jwbopwbAvojdsfejuhspvq/ch