In March 2011 Bulgarian Ministry of Finance published study overviewing the macroeconomic environment in Bulgaria. We would like to present to your attention in brief of the most important topics of the report:

• Industrial sales, domestic trade and construction indexes performance improved significantly in November 2010, according to the latest available data. Overall in 2010 GDP is expected to register a small positive growth, driven by strong exports expansion.

• Harmonized consumer inflation followed an upward trend throughout 2010, largely driven by international prices developments. Thus both its end-of-period and annual average values are very close to the official projections.

• The current account is expected to be almost balanced in 2010. Although trade balance deteriorated in November, services surplus expanded further.

• International reserves of BNB stood at EUR 12.977 bn, up by 0.4% y-o-y, as of end-December. The comfortable coverage of the monetary base, imports and short-term external debt underpin the stability of the Currency Board in Bulgaria.

• Bulgarian banking system operates under one of the most conservative bank supervision environments in the EU. The banks keep an adequate liquid position and are well capitalized well over the supervision requirements. Banking system remains stable and capable of making positive net profits, despite the dynamics of the non-performing loans.

• The unemployment rate went up to 9.2% at the end of December, up from 9.1% in the previous month and by 0.1 pp higher with respect to the same month a year earlier. Unemployment numbers totaled 342.4 thousand persons at the end of the year, going up by 1.3% compared to December 2009, which is, however, a 6.7% decrease as compared to the beginning of 2010.

• Fiscal reserve stood at 6.4 billion BGN as of 30.11.2010. Although decreasing by 21.1% y-o-y, the fiscal reserve was preserved at levels comfortably above the legally defined 4.5 billion BGN

• Government debt level projected for 2011 is among the lowest in the European Union. Government debt, including government guaranteed debt, amounted to 16.4% of GDP as of end-November, External government debt accounted for 10.97%, while domestic debt was 5.45% of GDP

1 ^ Ministry of finance