The European Central Bank (ECB) will most likely keep its main interest rate at 2.65% at its meeting at the end of the month, less than three weeks away. A rise may come in December or early next year. That is the forecast of bankers from leading banks at the "Finance: Equations and Solutions" forum.
Borrowers in Bulgaria should not expect sharp changes, the bankers said. The exception is loans tied directly to Euribor, the rate at which banks in the eurozone lend to each other.
"We do not expect sharp moves, except on loans tied directly to Euribor, where the effect is immediate," Dobromir Dobrev, executive director of corporate banking and markets at a commercial bank, told BNT. This means that on these loans a higher rate will show up in the monthly payment at once. On other loans, the system will absorb the pressure to raise rates, without sharp moves, Dobrev said.
Borislav Bangeev, chief director of corporate banking at a commercial bank, said rates will rise over the medium term. Borrowers without high debt will take this in their stride, and the rise will not hit them much, he said.
The bankers take a moderately optimistic view of the risks facing the sector. They listed weaker repayment discipline, higher debt, geopolitical risks and the idea of a "windfall profit" tax on banks.
"In economic theory there is no such concept as 'windfall profit'," Dobrev said. He said some countries have such a tax, but most do not, and not necessarily the most developed ones. It is usually brought in during years of extraordinary events and sharp outside shocks, and he sees no such situation now.
Bangeev questioned whether a levy is needed that cuts banks' capital when government policy relies on more investment in capital-heavy sectors: public infrastructure, transport links and digitalisation.
The bankers warned that such a tax would hurt Bulgaria's investment climate in the long run. In their view, the state budget's problem is not revenue but the need for the state to spend more wisely.
Their advice to customers is to adapt more flexibly to an increasingly unpredictable environment and to use their loans as efficiently as possible.