Bulgarian Businesses Operate at Increased Debt Levels
Bulgarian businesses have continued accumulating in unpaid debts over 2013, thus reaching BGN 171 B at the end of the year.
The data has been published in a report by the Bulgarian Industrial Association (BIA).
According to the information, inter-company loans jumped to BGN 117 B , almost half of which are overdue. The outstanding obligations to banks and other financial institutions amounted to BGN 46,9 B.
Additionally, the registered 1,6% deflation in 2013 practically means that the real debt amounts to BGN 173 B.
Chairman of BIA Kamen Kolev pointed out that ''the increase of debt itself is not a negative tendency, but the overall economic improvement also needs to be taken into consideration.'' He added that in the years of economic growth, indebtedness is also rising.
A slight improvement was shown, however, in terms of sales income. The debt to income ratio was 1,38 :1 as compared to 1,57 : 1 in 2009.
Short-term indebtedness increased by 20% in 2013, showing that companies don't have enough working capital.
The slow recovery rates of the EU economy, as well as tedious bureaucratic insolvency proceedings in Bulgaria are reported to make matters even worse.
According to the BIA report local government and municipalities have also accumulated BGN 277 M towards businesses.
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