08:47

16.02.17

2 min.

Inflation Eats up Returns on Bank Deposits in Bulgaria

Standartnews |

Inflation Eats up Returns on Bank Deposits in Bulgaria

The recent hike in the retail price of vegetables and petrol in Bulgaria has triggered a 1.3% inflation rate in the first month of 2017, the National Statistical Institute (NSI) has said.


This has been the highest inflation rate reported in Bulgaria for over four years now.


The inflation rate for the period Jan 2016-Jan 2017 is 1.4% - the highest annual inflation rate for over three and a half year now.


The annual inflation has now outgrown the interests on bank deposits in Bulgaria – the average annual interest on corporate deposits is 0.14% in BGN and 0.26% in EUR.


The average annual interest on the bank deposits of natural persons is 0.67% in BGN and 0.51% in EUR.


This becomes clear from the latest report of the Bulgarian National Bank (BNB).


In other words, if you hold BGN 1,000 in a Bulgarian bank, you will lose BGN 7.20 in a year's time, due to the low interest rates.
The high inflation rate in the first month of 2016 is mostly caused by a 3.5% increase in the retail price of foods, along with a 2.1% increase in the price of the most popular brand of petrol (A95H) and of Diesel – by 3.5%.


The retail price of fresh vegetables has soared by 27.8% since the beginning of 2017 and that of potatoes – by 10%.


The average retail price of fresh vegies this January was twenty-one percent higher than it was at the beginning of 2016.


Analysts explain the significant increase with the cold spell that gripped the country at the beginning of 2017 and made a lot of small greengrocers close down.


NSI has also said that shopping for clothes and shoes in Bulgaria is now cheaper than it was at the beginning of 2016.



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