THE EURO EFFECT – RATINGS IMPROVE AND MARKETS SOAR

Shelly Group (SLYG) announced preliminary results for H1, where sales grow 29% to EUR 53.9mln. The growth is in line with the targets established before the YE 2024 and management is confident that 2025 YE targets will be achieved. It also reiterated that the possible tariff war fallout is likely to have negligible effect to Shelly’s performance, as the revenues from it are still very little. The company will announce the unaudited consolidated financial results on 13.08.2025 after markets close.

ü  Credit rating agencies Fitch Ratings and S&P Global Ratings have upgraded Bulgaria’s long-term foreign currency credit rating to “BBB+” from “BBB” and changed the outlook to “stable” from “positive”. This marks the highest level within the upper-medium investment-grade category, following the EU’s approval of Bulgaria’s eurozone entry on January 1, 2026. S&P cited benefits such as ECB policy stability, better capital market access, and lower currency risk, projecting GDP growth of 2.4% in 2025 and 2.8% on average through 2028, led by private consumption. Fitch also views euro adoption positively, highlighting stronger monetary policy, reserve currency status for government debt, and ECB liquidity access. It forecasts 2.8% growth in 2025, supported by improved political stability. Moody’s credit rating for Bulgaria was last set at Baa1 with stable outlook. DBRS’ credit rating for Bulgaria was last reported at BBB (high) with stable outlook.

ü  Industrial production fell by 6.6% YoY in May 2025. Output slipped at a softer pace for manufacturing (-2% vs -7.3% in April), while production recovered significantly for mining and quarrying (8.4% vs -3.7%). Meanwhile, electricity, gas, steam, and air-conditioning supply contracted sharply (-26.6% vs -12%).

ü  The trade deficit widened to BGN 1,081.2 mln in May 2025 from BGN 1,033.0 mln in the same month last year, as exports fell much faster than imports. Exports declined by 4.6% YoY to BGN 6,517.5 mln due to lower sales to the EU (-7.2%), while it increased to non-EU countries (0.3%). Meanwhile, imports decreased by 3.4% to BGN 7598.7 mln, amid reduced purchases from non-EU countries (-15.6%).

ü  Construction output rose by 5.1% YoY in May. This marked the weakest growth since September 2024, primarily due to a sharp deceleration in specialized construction activities (4.5% vs 10.5% in April). Meanwhile, growth continued in both building construction (3.1% vs 2.9%) and civil engineering works (9.3% vs 8.4%).

ü  Retail sales surged 7.2% YoY in May 2025. The acceleration was driven by robust gains in non-food products including fuel (11.6% vs 4.0% in April), particularly for textiles, clothing, and footwear (17.0% vs 6.4%), computers, peripheral units, and software (13.3% vs -4.2%), information and communication equipment, household appliances, and leisure products (14.8% vs 1.3%), audio and video equipment (16.9% vs 6.7%), and other retail sales in non-specialised stores (15.6% vs 6.1%).