Radio Bulgaria

The overall sum of cash money in this country has grown by some EUR 1.5 bln. for the past year. Thus the annual growth of 15 percent is to the tune of nearly EUR 11 bln., data of the Central Bank of Bulgaria /BNB/ show. Those evaluate the quickest money, i.e. the cash we carry, what’s hidden in the cash desk or our savings, the bank accounts. This is the money we shop and cover different bills with or the sums companies pay to suppliers and employees.

Experts say that the increasing of quick money is a good sign for the economy and a symptom that the market starts breathing. i.e. companies are more optimistic about the economic situation, while ordinary people begin to spend more, which affects positively the consumption process. Other experts fear that the average Bulgarians reach for their final savings, in order for budget gaps to be filled in, since their salaries are not enough. However, the incomes have not been increased, or more people cannot be seen in the retail chain stores. Practically the grey economy is one of the reasons for the increased cash turnover. Is that really so? Here is the opinion of famous finance expert Emil Harsev:
“The fact that the population brings money into banks is mistakenly interpreted as taking out of savings to the liemlight. This is a statement of people, who are not aware of economic processes,” the expert says. “Practically this money is taken out of people’s own business that is small and tries unsuccessfully to go on in these times of crisis and depression. This is the capital of those 27,000 companies that have bankrupted or are in a process of bankruptcy over the past year, according to information from the Bulgarian Chamber of Commerce /BCC/. It is not true that this money have entered the turnover. This is an increase of the money that has got out of their companies’ turnover and entered the bank system. This is a freezing of money. However, on the outside it looks like an increasing of cash money.”

Grey economy has also contributed to the increasing of cash turnover.

“Of course this is the undercapitalization of companies,” Mr. Harsev goes on to say. “It comes from both the white and grey sectors. Here is an example: a company from the construction business used to work till now on different sites. We have received white and grey money, without precise accounting. However, the sector is currently dead and we moan at home. At the same time the money from the company are in the bank. This means that small companies do not have the opportunity to continue with the business they used to develop till 2009. For instance, they have invested their money in a store and bought some goods. Now the store bankrupts – you get rid of the goods, take out the money of the firm and put them in your personal bank account. That is how it is done.”

A part of this money comes from abroad. “This money is more than the entire EU funding that we receive,” Emil Harsev comments. This is the result from the labor of all Bulgarians that work abroad and transfer money to Bulgaria. Official data shows that this money amounts to EUR 1.5 – 2 bln. per year, while according to unofficial data it even exceeds EUR 3 bln.

English version: Zhivko Stanchev