불가리아 주요 경제뉴스 ( 12 – 19 DECEMBER 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 12 – 19 DECEMBER 2008 )

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Construction of Bulgaria's Belene N-plant to start in 2nd half of 2009

·        Skopje wants to join in Belene NPP construction

·        Bulgaria to transfer qualified laborers from Kozloduy NPP to Belene NPP

·        Turkmenistan ready to sell some 2.000 million cubic meters of natural gas annually

·        Bulgaria registers deflation in November

·        Analysts say inflation to fall in 2009

·        Bulgaria's Finance Ministry forecasts economic growth of 2,1% in 2009

·        Deposit war kills business in Bulgaria

·        The "Stanishev" plan injects BGN 1.2 billion in Bulgaria's economy

·        Bulgaria with the least labour productivity in EU

·        The lack of good infrastructure and employees - major problems in tourism

·        Face Off takes GUEST research to Bulgaria

·        Bulgaria's GDP up by 6.8% Y/Y in Q3

·        IMF cuts 2009 economic growth forecast for Bulgaria

• Nearly 54 per cent of businesspeople assess 2008 as successful year
• About BGN 330 М to be paid to grain and milk producers
• First Bison farm in Eastern Europe opened in Southeast Bulgaria
• JCRA downgrades Bulgaria’s rating
• New U.S.-Bulgaria tax treaty enters into force

·        Bulgarian authorities waste € 10 billion for 10 Years

·        LAN providers to explore new markets

·        Bulgaria - Turkey business forum opens in Ankara

·        Optimism reigns in IT sector

·        Ships for Algiers built in Ruse shipyard

• Slowdown in machine engineering in 2009

INVESTMENTS:

 

·        Investment agency chief expects € 5-5.5 B FDI in 2008

·        U.S. AES mulls second wind farm in Bulgaria, to wrap up energy projects worth total € 1.5 B by mid-2010

·        2008 most successful for German investment in Bulgaria

·        Bulgaria President wants greater investment dynamic with Turkey

• Sopharma unveils € 10 M logistics centre

·        Austria's ORS to invest BGN 100 M in Bulgaria's "Radio & TV Systems"

·        Grupo Metro to build € 25 M solar park

·        Metro Mladost signs € 113.5 M deal for underground transport extension

·        EVN to invest BGN 132 M in Bulgaria in 2009

·        Interhotel Sandanski invests BGN 1m in tennis courts

·        Holiday complex for € 25 M

·        EU Moves to Sofia in 2018

·        Bulgaria’s first retail park opens in Plovdiv

 

COMPANIES:

 

·        Bulgarian companies threaten to boycott banks

·        Gazprom to slash gas prices for Bulgaria by 40% in 2009

·        Carrefour to move into Bulgaria despite crisis

·        Technopolis opens its 21st store

·        Bulgarian companies extract gas for Nabucco

·        Bank branches and offices in Bulgaria

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

 

·        Bulgaria enjoys high economic growth

·        Frozen EU funds for Bulgaria catalyze the crisis

·        Industrialists propose measures to tackle the crisis

·        Sopharma's secret: Higher incomes against crisis

·        Global financial crisis is external threat to Bulgaria

·        PM Stanishev: Bulgaria remains very stable amidst Global Financial Crisis

·        Global Financial Crisis to drive large construction companies out of Bulgaria

·        Four European countries close their labor markets for Bulgarians

·        Bulgaria oils producer Prista Oil to boost exports as anti-crisis measure

Articles:

 

 

MACROECONOMY:

 

Construction of Bulgaria's Belene N-plant to start in 2nd half of 2009

 

The actual construction of Bulgaria's nuclear power plant in the Danube town of Belene could start in the second half of 2009 after the Nuclear Regulation Agency issues an official permit.The statement was made Saturday by the body's Chairman Sergey Tsochev during a seminar dedicated to its activities."Atomexportstroy, the Russian company, which is building the plant, is expected to send all the papers related to the project within days," Mr tsochev explained."After that our agency has to deliver its final decision within nine months," he added.The technical project's expertise will be conducted by three companies - a Bulgaria, a German and a French ones.The first sod of the facility has already been made by Bulgaria's Prime Minister Sergey Stanishev in the beginning of September.Then Stanishev and the Energy and Economy Minister Petar Dimitrov defined the start of the construction of the plant as "a Renaissance for Bulgaria's nuclear energy". "This is the largest industrial project in Bulgaria in the last eighteen years", the PM said, apparently excited by the event. He compared the fate of the Belene nuclear plant to the general condition of the country's economy during the post-communist transition after 1989. The project was frozen in 1990 after local people and environmentalists protested against it, and because the government did not have sufficient funds to continue the construction. Minister Dimitrov added the Belene plant would be a third generation nuclear power plant with a zero risk for failures.The President of Atomexportstroy Leonid Reznikov assured the public the construction of the plant was not going to cost more than the almost EUR 4 B already agreed upon. The CEO of the Bulgarian National Electric Company NEK Lyubomir Velkov said more than 10 000 workers will be employed during the construction, and 2000 specialist will be permanently employed at the first 1000-MW unit after its completion. The first reactor of the plant is expected to start operating in 2013.NEK will own 51% of the nuclear power plant. The German company RWE has won the bid for acquisition of the remaining 49%.

Skopje wants to join in Belene NPP construction

 

The National Electrical Company will export electricity worth 9.5 million euro to Macedonia, as reported from yesterday's inauguration of the Dubrovo-Chervena Mogila overhead power line, attended by Bulgaria's PM Sergey Stanishev and Minister of Economy and Energy Peter Dimitrov. The 150-kilomenter long power line costs 50 million euro. Bulgaria's participation in the project is 16,6 million euro. Bulgaria's PM Stanishev and his Macedonian counterpart Nikola Gruevski also discussed the possibility of Macedonia joining in the construction of Belene Nuclear Power Plant (NPP). Stanishev was firm that Belene NPP was an important guarantee of constant power supply not only for Bulgaria, but for the entire region. "Negotiations as to Macedonia's involvement in Belene NPP are yet to be scheduled," Stanishev clarified. Both Stanishev and Gruevski expressed their satisfaction with the economic partnership between Bulgaria and Macedonia. "The commercial exchange between our countries has increased by 15 times in the last 9 years", Gruevski pointed out. According to Stanishev, so far Bulgaria has invested 36 million euro in Macedonia.Gruevski expressed his hope that the trade exchange between Bulgaria and Macedonia soon reached 1 billion euro.

 

Bulgaria to transfer qualified laborers from Kozloduy NPP to Belene NPP

 

Bulgaria is most likely going to transfer several hundred highly-qualified specialists from the Kozloduy NPP, its only nuclear plant at present, to the Belene Nuclear Power Plant, which is still under construction.The news was reported Monday by the Pari Daily, which cites unnamed sources from Bulgaria's Ministry of Energy and Economy.The nuclear engineers to be transferred from Kozloduy to Belene are still employed at the 440 MW Units 1-4 at the plant. The oldest Units 1 and 2 were stopped in 2002, and Units 3 and 4 were shut down in 2006 in accordance with an agreement that Bulgaria made with the EU during its accession negotiations.This left the Kozloduy NPP with one two 1000 MW reactors - Units 5 and 5.More than 1 000 nuclear specialists potentially unneeded nuclear specialists are employed at Kozloduy, according to data provided by the Member of Parliament from the rightist Democrats for Strong Bulgaria party Ivan Ivanov.These persons are still employed at the Kozloduy plant as the process for putting out of exploitation of the first four units has not started yet, and the reactors are still filled with nuclear fuel.Ivanov is quoted as saying these highly-skilled laborers should not be sacked and lost, especially as Bulgaria's second nuclear power plant at Belene was going to need at least 500 nuclear engineers at its launch.The first unit of the Belene NPP is expected to start producing electricity in 2013-2014. The plant was started in the late 1980s but its construction was frozen after 1990, and was only reopened formally by the Prime Minister Stanishev in September 2008.The actual construction works, however, are not starting until the spring of 2009. The Belene Plant is going to have at least two 1000 MW units.Both the town of Kozloduy and the town of Belene are located on the Danube River.

Turkmenistan ready to sell some 2.000 million cubic meters of natural gas annually

 

Turkmenistan is ready to sell Bulgaria some 2.000 million cubic metres of natural gas annually. An agreement to this effect was reached by Bulgarian President Georgi Purvanov during his current official visit to Turkmenistan, the first at the summit level between the two countries. Purvanov conferred here on Friday with his hosts, Turkmen President Gurbanguly Berdimuhamedow. The official delegations held plenary talks."I gratefully accept the readiness you have expressed for Bulgaria to be able to purchase some 2,000 million cubic metres of natural gas in anticipation of the launch of Nabucco, along routes that will prove feasible after future negotiations with the countries concerned," Purvanov told a joint news conference, after the Turkmen leader expressed readiness to this effect.The quantities of natural gas agreed in Turkmenistan, as well as the ones agreed by President Purvanov during his visits to Azerbaijan and to Egypt, are Bulgaria's contribution to the Nabucco gas pipeline project, which is a priority project for the EU and in which Bulgaria is involved.An agreement on economic cooperation between Bulgaria and Turkmenistan, a memorandum of mutual understanding on energy cooperation and an agreement on cooperation between the two countries' chambers of commerce and industry were signed in the presence of the two heads of State.Presidents Purvanov and Berdimuhamedow signed a joint declaration on the results of the visit.

 

 

Bulgaria registers deflation in November

 

The Bulgarian National Statistics Institute registered a 0,1% deflation in November, according to data published on Friday.However, since the beginning of 2008 until the month of November, prices of services and goods in the country have gone up by 12,8%, while for the November 2007 - November 2008 period they have increased by 9,1%.The November deflation is largely a result of price decrease in the transport (3,1% down) and services (5,2% down) sectors, and fuels for household needs. Clothing and shoes, rents, house improvements, hotels and restaurant services, and doctor exams have registered price increases in November.Some food items' prices such as ground and chicken meat have gone up, while prices of flour, bread and cheese have gone down.

 

Analysts say inflation to fall in 2009

While the eurozone may be facing deflation, Bulgaria was most likely to avoid falling prices that would threaten new layoffs as empoyers struggle to sell stockpiles of produce, analysts told Dnevnik daily. All eyes are on the National Statistical Institute, due to release on December 12 the November consumer price data - tracking inflation in the first month the Government owned up to the crisis, which it previously stoutly denied.The Finance Ministry sees the inflation rate falling to 5.7 per cent next year but macroeconomists decline to make any forecasts.The Bulgarian economy will grow in 2009, although the eurozone is expected to stay in recession, because the country still offered numerous business opportunities and would keep its appeal as an investment destination as the crisis is expected to roil the world, Luchezar Bogdanov, macroeconomist at local think-tank Industry Watch, said.According to Georgi Ganev from the Centre for Liberal Strategies, however, Bulgaria could slip into a recession after possible negative growth in the first two quarters of 2009. The consumer prices index was unlikely to drop with the higher cigarette excise duties due to come into force next year, Ganev said.Inflation will be fuelled in the long-term by brisker economic growth than in Old Europe and rising wages.The biggest exporting industries saw output and sales slide in October and will target smaller sales and costs putting wage growth on hold for some time, forecast Desislava Nikolova, macroeconomist with Raiffaisenbank.

Bulgaria's Finance Ministry forecasts economic growth of 2,1% in 2009

Bulgaria's Ministry of Finance forecasts a 2,1% economic growth in 2009, the Finance Minister Oresharski announced in Parliament Tuesday during the second reading of the 2009 draft budget.In his words, this was a moderately pessimistic forecast, and a new one most likely would be prepared in January 2009.Oresharski also pointed out the 2009 draft budget included a moderately optimistic economic growth forecast of 4,7% since the European Commission had predicted Bulgaria's economy would grow by 4,5%.The Finance Minister also said the 2009 draft budget included sufficient fiscal buffers, and that there was no reason for concern over the effects of the global financial crisis in Bulgaria.During the debates the leader of the rightist Democrats for Strong Bulgaria party and former PM Ivan Kostov insisted that the government reduce the expected income by BGN 1 B so that the taxes could be reduced in order to leave additional funds in the economy.Kostov believes the current draft budget would only further inhibit business development, and would contribute to the recession.

Deposit war kills business in Bulgaria

 

A total of 29 financial institutions are fighting to attract the limited funds of the households in the country.The financial meltdown on capital markets made banks in Bulgaria to increase the interest rates on the local market. only for a year, from October 2007 to October 2008, the average deposit interest jumped by 48% to 6.29 on an annual basis. Despite this jump, the last month reported drop of deposits by BGN 1.4 billion: by end-October they were BGN 52.4 billion against BGN 53.8 billion a month earlier. The problem is the deepening war for funds among the banks in the country. According to Tsvetan Vassilev, president of the Supervisory Board (SB) of Corporate Commercial Bank (CCB), some banks are trying in this way to solve their short-term liquidity problems. Some depositories owned by foreign banks were asked to restore part of their debts abroad, he commented for Pari daily. Such interest contest might create problems for the companies in Bulgaria as the credit price is determined by the interests the banks pay on the deposits. An additional rise in the credit price will limit the access of companies to credits and this will slow down all economy. The first problems in business are already evident: only in October the firms drew BGN 964 million from their bank accounts and analysts forecast the tendency to continue. The result is less competitive local companies in times of crisis.

The "Stanishev" plan injects BGN 1.2 billion in Bulgaria's economy

The "Stanishev" plan for economic stability and progress in 2009 provides support for the financially-troubled Bulgarian companies that plan to lay-off personnel so as to survive the crisis. Bulgaria's PM Sergey Stanishev presented the plan yesterday, at the Fifth Economic Forum organized at Sofia's University for National and World Economy.
The budget for next year provides a financial injection for the business in the size of twenty-seven million levs. The "Stanishev" plan targets businessmen and producers, who have to cut down the working hours of their employees due to market stagnation and shrinking demand. The employees who have their wages cut down because of the crisis will be supported by the state with half of the current minimum salary in Bulgaria. Calculations show that each employee will receive about 120 levs extra. However, the state can afford supporting the companies for only three months. Experts say the plan will help 16,000 Bulgarians keep their jobs despite the stagnant market.The "Stanishev" plan also provides support for those who have lost their jobs because of the crisis. The minimum unemployment aid in Bulgaria becomes 120 levs per month and the maximum - 240 levs, the plan also provides. In addition, over the first six months the unemployed will be receiving 130% of their unemployment aid and after that they will be receiving seventy percent of the sum."Bulgaria has more reasons to join the Eurozone than some of its current members," Stanishev answered the question whether introducing the euro in advance would lessen the world financial crisis's consequences.
To his words, Bulgaria meets four of total five criteria for introducing the euro. The only obstacle is the high inflation rates. "The reason for the highs inflation is the significant economic growth," Stanishev said. According to forecasts of the National Statistical Institute the economic growth for 2008 would be about 6.5%. The inflation will not exceed 10%."Stanishev" Plan envisages 700 million levs of state subsidy in case the crisis starts cramping the economic activity. Besides the government has put aside other 500 million for the Bulgarian Development Bank. This money will serve to encourage banks to allot credits to the small and middle business, as the anti-crisis plan reads.
"To stimulate the trade, the government will not raise taxes," Stanishev said.The Prime Minister was explicit that Bulgaria was stable and would remain so. Other items in the anti-crisis programme map out state subsidies worth 211 million levs for the agriculture, 110 million for farmers and plant-growers."Of course the milk producers who protested will also receive subsidy," Stanishev said.The largest sums of money would be given on the Rural Areas Development Programme that starts this year."By the end of 2009 a billion euro will be spent on the mountainous and other disadvantageous regions," the PM promised.

Bulgaria with the least labour productivity in EU

 

Bulgaria remains the last in European Union in relation to productivity of labour, report of World Bank showed. The institution presented its vision for the investment climate in the country in Higher School in Insurance and Finances. The reason is the unpredictable and frequent changes initiated by the government, citing survey in which 70% of managers support this opinion. Productivity in Bulgaria is 15% lower than in Romania, the last but one in the list.

The lack of good infrastructure and employees - major problems in tourism

This was announced by Deputy-Chair of the State agency on tourism Hristo Hristov in front of participants in a discussion for the development of the industry. According to Hristov, cited by Radio Plovdiv, another barrier is the restricted budget of the agency, which does not give opportunity to Bulgaria to advertise itself in a way which attracts tourists from all over the world.He added that the Law for tourism is outdated and there must be a new philosophy - it will be sought through changes in the law and in the strategy for steady development of the industry.In this connection the Chair on Tourism in Plovdiv Lyubozar Fratev announced that on December 18 the Municipal council will accept a strategy and a plan for the development of tourism in Plovdiv by 2013.This will give the authorities in the city a basis on which to work long-term, and not piecemeal like now.The other important step for Bulgaria's presentation abroad is the forthcoming tourist zoning. Our country must be presented with several key destinations, like Thrace - center of the Thracian civilization, Fratev added and specified that Thrace is one of the eight tourist zones in the country.

 

Face Off takes GUEST research to Bulgaria

Face Off, Bulgaria’s first mystery shopping company, will conduct throughout 2009 the country’s first GUEST Study. The method allows businesses to measure service quality against five criteria: G (Greet), U (Understand customer needs), E (Explain), S (Suggest) and (Thank customer and invite again). The results of the research will be announced in end-2009 together with rankings by companies and industries. The programme has so far drawn interest from the auto industry, banks, FMCG retailers, furniture shops, black and white goods chains, hotels and restaurants, said Face Off sales director, Sashka Pavlova.

 

 

Bulgaria's GDP up by 6.8% Y/Y in Q3

Bulgaria's Gross Domestic Product (GDP) stood at stood at 18.5 bln leva (9.515 bln euros) in the third quarter of 2008. The GDP per capita stood at 2,430 leva (1,242.2 euros) preliminary data show. The GDP in real terms marked an increase of 6.8% compared to the third quarter of 2007. The gross value added generated in the economy amounted to 15.517 bln leva at current prices, which represents an increase of 8.2%, compared to the third quarter of 2007.The share of the gross value added in the agriculture sector rose by 2.6 percentage points year on year to 11.5%. The share of the gross value added in the services sector stood at 58.5%, which represents a decrease of 0.6%, compared to the corresponding period of 2007. The share of the industrial sector shrunk by 2 percentage points - from 32% in the third quarter of 2007, to 30% a year later.In terms of final use components, the share of individual consumption stood at 70% of GDP in the third quarter of 2008, up by 5.9% year on year. The value of Bulgaria's imports of goods and services exceeded by 2.278 bln leva the value of exports in the third quarter of the year. Bulgaria's GDP amounted to 48.037 bln leva in nominal terms in the first nine months of the year. The figure represents an increase of 7%, compared to the year-ago period.

IMF cuts 2009 economic growth forecast for Bulgaria

Bulgaria's economy will grow by only two per cent in 2009, International Monetary Fund (IMF) officials forecast on December 15. The Fund's previous forecast was for 6.3 per cent economic growth.IMF's data for the first nine months of the year showed that Bulgaria's economy continued "developing well" despite signs of growth slowing down, the head of the IMF mission, which conducted a regular Article IV review of the Bulgarian economy in December, Bas Bakker, said as quoted by Bulgarian news agency BTA.The IMF expects the current account deficit to shrink from 24 per cent of gross domestic product (GDP) in 2008 to 15 per cent in 2009, while inflation would fall to 4.5 per cent as food prices worldwide fall."The world economy is slowing and this will have two effects on Bulgaria: lower foreign demand and a drop in capital inflows, which have been an important source of growth so far," Bakker was quoted as saying."Fiscal surpluses remain an important support for the currency board, and also essential to preserve balances in the fiscal reserve account - a necessary shield if problems were to emerge," he went on to say.Bakker also reiterated the IMF's standing advice to rein in wages, arguing that continued growth of worker remunerations could have an adverse impact on Bulgaria's ability to compete internationally.He did not comment, however, on whether Bulgaria should take out an IMF loan to boost cash reserves, although analysts have warned that Bulgaria's high level of private debt put the country at risk, advising authorities to take out the IMF loan as a precaution.Bulgaria's Government remains adamant that its banking system is sound and that it has sufficient reserves not to need financial support from the IMF.

 

 

 

Nearly 54 per cent of businesspeople assess 2008 as successful year

Nearly 54 per cent of the respondents in a poll conducted by the Bulgarian Industrial Association (BIA) to assess 2008 in terms of business said the year was successful, sources from BIA said, adding that this is a serious drop against the figure in 2007 when 73 per cent assessed it as successful. Managers who described the year as unsuccessful

increased considerably to 33 per cent, from 10 per cent in 2007.The survey was conducted between November 15 and December 5. It covered all economic sectors, as well as various sized enterprises from all planning regions. The reasons for the more negative results in the 2008 poll are attributed to the impacts on the national economy of the global economic crisis which started to be felt in the fourth quarter. The crisis affected most seriously sales, according to 31 per cent of the respondents in the poll, the volume of production, 23 per cent, and the number of jobs, also 23 per cent. Nearly 22 per cent of the participants in the survey have not yet felt an impact of the global crisis. About 62 per cent of the managers expect for the crisis to worsen in 2009 while 33 per cent said it will ease off. Five per cent would not commit themselves to a projection. In 38 per cent of the cases anti-crisis measures of companies feature reduction of investments, 18 per cent plan to cut jobs, 16 per cent plan to re-orientate production to other activities and markets, while another 16 per cent are not yet clear about their future plans.The biggest share of corporate investments in 2008 went to staff training (30 per cent), followed by investments in machinery and equipment (29 per cent), in ISO, OHSAS and HACCP management systems (17 per cent) and purchase of buildings (15 peer cent). The trend whereby the least investment is made in industrial property (trade marks, patents, industrial design) persisted in 2008 as well when as little as 9 per cent of the respondents made such investments. In 2007 this figure was 11 per cent. Planned investments in 2009 will be broken down in almost the same ratio as in 2008: 36 per cent of the respondents plan to invest in staff training, 28 per cent in machinery and equipment, 12 per cent in the purchase of buildings and as much in management systems and industrial property. To solve existing problems most of businesses will rely on European funding, among other things. Fifty-five per cent of the respondents said they are ready to submit projects applying forEuropean funding while 20 per cent are hesitant as to such plans. Eighteen per cent do not plan to apply with projects  while 7 per cent said they lack the necessary resources (including human resources) to do so. The share of business mistrust in programmes for European funding increases compared to 2007, although by a small amount. In 2007 58 per cent of businesses were ready to submit projects while 13 per cent had no such intentions. The survey established growing awareness about the conditions for project funding: 47 per cent of the respondents said they are fully informed (against 23 per cent in 2007), 46 per cent are well informed but need further information (57 per cent in 2007) and as little as 7 per cent said they are not well informed (20 per cent in 2007).Asked what they need in order to win project financing, 25 per cent of the respondents said they need to design a project, 18 per cent need co-financing, 17 per cent, consultation, 14 per cent, proper staff, 10 per cent, training, 9 per cent, partners,7 per cent, technical facilities and supplies. Compared to 2007 the greatest increase, of 5 per cent, is in the need of proper staff, while the greatest drop, of 14 per cent, is in the need of consultation.

 

 

 

 

 

About BGN 330 М to be paid to grain and milk producers

 

Allotting of about BGN 270 million to grain producers will start on Wednesday, Bulgarian Minister of Agriculture and Foods Valeri Tsvetanov said before journalists, cited by FOCUS News Agency. In Minister’s words BGN 140 million of the amount are state aid and the rest part is EU subsidies. Later today or tomorrow is expected acknowledgment from the Technical Commission of the European Union for permission of a state aid to Bulgarian milk producers. The Minister prognosticated that it is very likely the amount of BGN 60 million to be paid to the milk producers till December 20.

 

First Bison farm in Eastern Europe opened in Southeast Bulgaria

The first bison farm in Eastern Europe was started Friday in southeast Bulgaria with the arrival of the first 12 male buffaloes. The farm is located in the village of Orlov Dol ("Eagle's Valley") close to the town of Topolovgrad, Haskovo District, and is set up by "Eurobison" - a joint Swiss-Bulgaria venture, which is going to use the North American animals as a tourist attraction while raising them for meat.Eurobison has already invested EUR 1 M in the project, and is applying for EU funding to further develop the innovative enterprise.The 12 Canadian buffaloes, which were brought by trucks to Bulgaria from Germany, were set free on a plot of 500 decares.By February 2009, the farm is supposed to have a total of 184 buffaloes, including 70 inseminated females. Eurobison has hired a plot of 1 500 decares but it would most likely need several thousand decares more as the raising of one bison requires 10 decares of steppe.Apart from trading with buffalo meat, the Swiss-Bulgarian firm is going to use the animals to develop hunting tourism. The hunting down of one buffalo will cost EUR 4 000. The hunter will be allowed to keep the trophy but the meat would be kept by the firm, processed and exported. The tourist profile of the bison farm in Orlov Dol is also going to include elements of the infrastructure of a Wild West town - a bar, a church, a square as well as rodeo shows.

 

JCRA downgrades Bulgaria’s rating

The Japan Credit Rating Agency (JCRA) lowered Bulgaria’s long-term foreign currency rating to BBB from BBB+ with negative outlook, the Finance Ministry said.The agency also cut the country’s long-term local currency rating to BBB+ from A- with negative outlook.The rating action reflects the tight global credit market and the country’s need for external funding. It was triggered by the rise in Bulgaria’s short-term external debt, the bulk of it by banks, against the backdrop of a wide current account gap.The analysts said Bulgaria’s rating continues to be supported by a sound fiscal position backed by a solid fiscal surplus, a significant reduction in government debt and the presence of a currency board mechanism pegging the lev to the euro.JCRA is the third agency after Fitch and Standard & Poor’s to downgrade Bulgaria’s rating in the recent months.

 

 

 

 

New U.S.-Bulgaria tax treaty enters into force

A new tax treaty (and accompanying protocols) with Bulgaria entered into force December 15, the U.S. Department of the Treasury announced Tuesday. This agreement is designed to avoid the possibility of double taxation and prevent fiscal evasion with respect to taxes on income for U.S. and Bulgarian firms operating in each others' countries and thus, spur international trade and investment between our countries. The treaty and first protocol with Bulgaria was signed in Washington on February 23, 2007, and the second protocol with Bulgaria was signed in Sofia on February 26, 2008. The U.S. Senate approved the new treaty and protocols on September 23, 2008.

Bulgarian authorities waste € 10 billion for 10 Years

Bulgaria's state authorities have wasted over 20 billion leva (EUR10 bln) for the last ten years, with half of the investments failing in the end, the country's newspapers write today. A research carried by the Institute for Commercial Economics (IPI) think-tank shows that of the EUR23 bln. only 8 have been spent on projects and programs that achieved their goals. "There is absolutely no data for over 10 billion leva", says IPI's Peter Ganev. According to Sega daily the biggest spenders with no visible effect are the Ministry of Social reforms, the Ministry of Finance and the Ministry of Environment and Waters. The research renders as a failure all the projects that exceeded their budget or didn't reach their goal. For the last 10 years most of the failed projects are from 2005 when the last parliamentary elections were held. "This could be explained by the change of administration as the new Cabinet stepped in", Ganev said. Around one half of all state initiatives since 1998 have failed, Ekspres daily points out. More so there is not a single state institution to avoid being on the black list. And although all the ministries, state agencies, committees or universities have squandered tax-payer money, ministries are on top of the list with the biggest sums.

LAN providers to explore new markets

 

Speedy Net is ready to step on triple play market, Cisco announced. The Internet supplier has changed all its equipment with technology of the net giant. At present, the company provides Internet, VoIP and fiber to the office and soon will offer IPTV, video surveillance and other services. In September, Megalan LAN Internet provider also announced plans to step on triple play market and had invested BGN 3 million for that purpose.

Bulgaria - Turkey business forum opens in Ankara

Bulgaria - Turkey business forum opens Wednesday in Ankara as the official visit of a Bulgarian delegation led by President Georgi Parvanov enters a second day.About 20 representatives of the Bulgarian business are to take part in the forum. Later in the day Parvanov is scheduled to meet Turkish Prime Minister Recep Erdogan The Bulgarian President has already met his Turkish counterpart Abdullah Gul, who commented that trade between the two countries is rising rapidly and for 2008 it amounts to USD 5 B.

Optimism reigns in IT sector

All areas of the branch, software, hardware and communications, report positive results
The year of 2008 might be defined as good for the information and communication technologies sector in Bulgaria, is the opinion of both analysts and leaders in the branch. The sector holds 10% of the gross domestic product of the country and over the last few years has grown with considerably quicker rate compared to other branches of economy.
The year was yet another successful year in which we managed to keep the growth rate and also to step on new markets, Georgi Brashnarov, chairman of BASSCOM, association of Bulgarian software companies, said. A proof of this is the number of installed systems for business management, which occupy a considerable share of the software business in the country. By the end of 2008, their number will be 700, which is by 20% more than in 2007. Distributors are also pleased with the results in 2008. Laptops hold 57% of the PC market in Bulgaria and the sales grew by 117% for the nine months of the year. For the same period, stationary PC sales jumped by 36% and that of servers by 16%. Telecommunications are the least affected by the crisis. MobilTel revenues for the third quarter added 2.6% to EUR 179 million. GloBul's incomes for the nine months of 2008 appreciated by 10.7% to BGN 649 million. Compared to other branches, optimists in IT sectors for 2009 are more than the pessimists.

Ships for Algiers built in Ruse shipyard

For the first time "The Ruse shipyard" constructs ships for Algiers, the company announced. The wife of the Algerian ambassador will become a godmother on Saturday of the first ship, constructed for the North African country. The solemn ceremony will be carried out on the pier of "Varna shipyard".At the moment the ship is on field tests in Varna, after which it will be sent to its owner - the national shipping of Algiers. It has been equipped with anti-piracy protection, which is a measure against the frequent pirate raids against merchant and passenger sea vessels.At the moment two ships are being built for the Netherlands, the biggest ships ever built in Ruse. Up to now six sea vessels have been ordered by the Dutch company and in 2009 the first one from the series will be submitted to their owner. Another four similar ships have been ordered by the German shipping "Briese".

Slowdown in machine engineering in 2009

Total sales incomes of the five biggest in market capitalisation companies in the machine-building sector grew by 2% to BGN 154.8 million for the third quarter of 2008, calculations of Pari daily show. This is a seven-fold drop after the 14-percent sales jump for the first six months of the year. The five companies are M+S Hydraulic, Hydraulic Elements and Systems, Sparki AD, Elprom ZEM and Mashstroy. Total net profit of Top 5 in the sector in relation to market capitalisation drops by 5% to BGN 13.9 million. In times of global slowdown, engineering industry is expected to be one of the most affected sectors, Daniel Dimitrov from Real Finance commented. Price drop in raw materials will decrease expenses of companies, which is positive. At the same time slump of orders is also expected which will result in less incomes next year. By the end of the first quarter of 2009 at the earliest might become clear which companies have survived the crisis and which were hit by it, is the opinion of brokers.

INVESTMENTS:

 

Investment agency chief expects € 5-5.5 B FDI in 2008

Foreign direct investment (FDI) in Bulgaria will reach five to 5.5 billion euro in 2008, financial news website investor.bg quoted the head of InvestBulgaria government agency Stoyan Stalev as saying. Last year, FDI in Bulgaria was 6.11 billion euro.FDI in the first nine months of the year was 3.66 billion euro, compared to 4.7 billion in the same period of 2007, Stalev said, citing Bulgarian National Bank data.Despite a big drop in real estate investment, which halfened from 1.79 billion euro in the first three quarters of 2007 to 920 million euro in the same period of this year, their loss waspartially made up by investment in production capacities, which grew from 158.6 million euro to 596.7 million.With real estate projects no longer qualified to apply for investment certificates from InvestBulgaria, which allow recipients to receive state aid to cover infrastructure costs, the agency has only awarded 13 such certificates in 2008.The total investment in those projects is set to reach 1.6 billion euro and they will provide 3000 jobs in the construction stage alone, investor.bg said. Of them, 11 projects were in the industrial sector.

U.S. AES mulls second wind farm in Bulgaria, to wrap up energy projects worth total € 1.5 B by mid-2010

U.S. energy company AES Corp said on Tuesday it is considering a second wind farm project in Bulgaria and plans to wrap up another two energy projects in the country worth a total 1.5 billion euro ($2.0 billion) by the middle of 2010. The second wind farm will be located northward of a 156-megawatt wind farm that AES Corp is in the process of building in Kavarna, in northeastern Bulgaria, and will have a similar capacity, of at least 100 MW, AES wind projects managing director for Europe John Bottomley told a news conference. "We are looking to develop a similarly-sized project also with [our partner, Bulgarian-German JV] Geo Power. We recently established another partnership, with another Bulgarian developer, to also develop large wind project again in a different part of the country," Bottomley said and added that the company is looking for opportunities in the region of Silistra, on the Danube. "What our strategy is is to try to develop wind projects throughout Bulgaria," Bottomley added. AES plans to complete its 156-MW wind farm in Kavarna worth 270 million euro by the middle of 2009 and put it on stream in October, the company said in a statement, The group also aims to wrap up the construction of a 670-MW coal-fired power plant, Maritsa East I, in southeast Bulgaria, worth 1.2 billion euro by May 2010, AES country manager in Bulgaria, Peter Lithgow, told the same news conference. AES (www.aes.com), one of the world's largest power companies, has operations in 29 countries.

 

 

 

 

 

 

 

2008 most successful for German investment in Bulgaria

In an interview for Profit.bg the Agency for Economic Analysis and Forecasts stated that investments in Bulgaria, coming from Belgium, Luxembourg, UK and Spain, have declined considerably at the expense of other countries, among which is Germany. This gave us grounds to contact the German-Bulgarian Chamber of Industry and Commerce on this issue. Profit.bg discussed with Andreas Schaefer, deputy chairman of the German-Bulgarian Chamber of Industry and Commerce, issues such as the expected German investments in Bulgaria in 2009, the investment of Bulgarian companies in the Europe's biggest economy and why Bulgaria attracts German investment.

Mr. Schaefer, what is the reason for the growth of German investments in Bulgaria at the expense of investments from other countries? What are your expectations for this process in 2009?

We have just polled our members about this question, and they are expecting German investment to drop because of the global economic turmoil. However, we believe that German investment will be less affected by the current economic situation than investments from many other countries. German investors have been quite reluctant to invest in real estate - the sector hardest hit by the crisis. In the past we have received a lot of criticism for this conservative attitude, because it caused Germany to lose their position as the biggest investor in Bulgaria. Now this works out as an advantage for both sides: German companies tend to focus on projects that create jobs and that are based on a long-term strategy. They are not so easily influenced by a temporary slowdown of the economy.

Why German business invests in Bulgaria and what are the most attractive sectors of the Bulgarian economy?

Producers like Liebherr, Festo and Grammer see Bulgaria as an attractive location for industrial operations. Their factories help to reverse the de-industrialization of Bulgaria that happened in the 1990s, and they offer attractive opportunities for local suppliers. German retailers like Metro, REWE, Kaufland, Praktiker, Lidl, Plus, and Penny set up outlets because the Bulgarian market is growing, and they can be competitive by offering lower prices, higher quality or a wider range of products. Others like SAP or Lufthansa Technik like the combination of qualified engineers, competitive salaries, and the geographical proximity to major markets. And yet others like Fraport and E.ON want to bring their know-how to Bulgaria to improve existing outfits. Besides, we have hundreds of sales and purchasing offices. Germany is the biggest exporter worldwide, so German companies have a global network of country offices in all major markets.

Do you have information on the volume of German direct investment in Bulgaria in recent years and when was their peak? What is the investment activity of Bulgarian companies in Germany?

Germany has invested over a billion Euros in Bulgaria, the bulk of it after 2004. By that time it was pretty sure that Bulgaria would join the EU and that the macroeconomical stability was something permanent. This year was the most successful in terms of German investment. In the first three quarters German companies have invested 320 million Euros in Bulgaria; several new plants have opened or have increased their capacity. Bulgarian companies have mainly invested in South Eastern Europe, the biggest destinations being Serbia, Turkey, Macedonia, Romania, Cyprus and Greece. Outside this region, the USA and Germany have been the main markets for Bulgarian investors, receiving 21 and 18 million Euro respectively. Most Bulgarian investors open sales offices in Germany in order to have a foothold in Europe's biggest economy. A notable exception is Telerik, a Bulgarian IT company which has recently bought its German peer Vanatec. I hope that more companies will follow in their footsteps, because this will strengthen Bulgaria's image as a dynamic and innovative economy.

We live in an interesting time and the sentiment of German managers in the latest survey of the German-Bulgarian Chamber of Industry and Commerce is not optimistic at all. What are in your opinion the serious problems of Bulgarian economic life?

The recent pessimism was mainly caused by external factors: a slowdown in global demand and tightened conditions for financing. In general, German companies are doing good business in Bulgaria. It is an expanding economy, and macroeconomic conditions have steadily improved in the past ten years. Apart from joining the EU, Bulgaria has slashed taxes, the currency was kept stable and the government managed to run a budget surplus. However, there remain weak points that companies criticize in our annual business surveys. These weaknesses circle around the transparency of public procurements as well as a perceived lack of impartiality when it comes to implementing rules and regulations. And the vocational training needs to be brought in line with the needs of a modern economy, so that those who do not study become „Facharbeiter" - specialists with theoretical and practical training who take pride in their skills. These are challenges that Bulgaria needs to tackle no matter if there is a global crisis or not. Hopefully the current feeling of urgency will help to accelerate the necessary changes, so Bulgaria can become an even stronger and more dynamic partner in the future.

Bulgaria President wants greater investment dynamic with Turkey

 

Bulgaria's President Georgi Parvanov said Wednesday in Ankara the investment flows with Turkey had to be intensified.During his closing speech at the Bulgarian-Turkish business forum, which was organized in Ankara in the context of his state visit there, Parvanov pointed out the recent growth in the bilateral trade was largely due to the fruitful political dialogue.In his words, the Bulgarian-Turkish relations were currently in their best condition since the two states established diplomatic ties.The President said before the bilateral business forum that Bulgaria was the only EU country offering such a low level of taxation of foreign investments. He pointed out the energy sector was a priority in the bilateral economic relations.Parvanov also declared himself in favor of liberalized visa regimes for businessmen, and for more investments in the infrastructure of the checkpoints on the Bulgarian-Turkish border.The President also reminded that during a similar business forum five years ago, he had promised to host a banquet when the Bulgarian-Turkish trade reached USD 1 B. He admitted he was late in fulfilling his promise since the bilateral trade now stood at USD 5 B. According to data presented during the business forum, the fully-owned Turkish firms with business activities in Bulgaria are 1 900; there are also 1 500 joint Bulgarian-Turkish enterprises as well as 50 representations of Turkish companies located in Bulgaria.

 

Sopharma unveils € 10 M logistics centre

Bulgaria’s health minister Evgeni Zhelev and Sopharma executive director Ognyan Donev on Friday cut the ribbon on the drug maker’s new EUR 100 million logistics terminal. The unit is equipped with an automated drug storage and sales management system able to handle 300 customer orders a minute, the company said. The system is expected to boost efficiency sevenfold and create 25 jobs. Sopharma is Bulgaria’s biggest pharmaceuticals distributor operating 12 Bulgarian plants and three in Russia, Ukraine and Serbia.

Austria's ORS to invest BGN 100 M in Bulgaria's "Radio & TV Systems"

 

The future owner of Bulgaria's National Unit "Radio & TV Systems" (NURTS), the Australian company OPC announced Friday it was going to invest BGN 100 M in the development of the network.NURTS is still part of the Bulgarian Telecommunications Company BTC but it will be sold to ORS, which won a competitive international tender. The sale still has to be approved by the relevant regulatory authorities, and is expected to be finalized by March 2008. The exact sum that ORS will pay for NURTS has not been revealed.The future owner also did not specify whether it would raise consumer prices for those using NURTS radio and TV transmission.Bulgaria is supposed to switch from analogous to digital transmission by the end of 2012. ORS representatives pointed out Friday they had plentiful experience in this respect.Bulgaria's NURTS operates a national microwave transmission network carrying TV, radio, voice, and data transmission.60% of ORS GmbH & Co KG is owned by the Austrian public broadcaster ORF, and 40% belongs to Sendeanlagen GmbH, which is a member of the Reiffeisen Group. ORS is responsible for the technical maintenance of the DVB-T infrastructure in Austria.

Grupo Metro to build € 25 M solar park

 

The Spanish real estate company Grupo Metro wants to invest EUR 25mn in the setup of 5MW solar energy park in the southern part of the country. The project should be completed in five years. Grupo Metro will produce 6.75mn KWh of electricity annually in the country. It has invested EUR 15mn in land and apartments in Bulgaria since last summer.

Metro Mladost signs € 113.5 M deal for underground transport extension

 

The local consortium Metro Mladost, led by Trace Group, and the municipal firm Metropoliten signed a BGN 222mn (EUR 113.5mn) contract, VAT included, for extending the first line of the underground transport in the capital city of Sofia to the airport. The financing has been secured by the European Investment Bank and state budget transfers. The consortium should build 2.15 kilometres of railway lines, two metro stations, and an underground parking area in 39 months. Metro Mladost comprises two subsidiaries of Trace Group and two other local firms. The first underground line comprises 7.2 kilometres of railroad and 6 metro stations.

 

 

 

EVN to invest BGN 132 M in Bulgaria in 2009

 

The Austrian-owned electricity provider EVN announced Monday it intended to invest a total of BGN 132,2 in Bulgaria in 2009.Almost 70% of these will be invested in the existing electricity network. BGN 44,2 M will be spent for improving the voltage and safety of the electricity supply, BGN 34,5 M will go for improving the quality of the electricity distribution network, and BGN 12 M will be spent for reducing the technological losses.Of the remaining sum, BGN 31,8 M will be spent to attract new clients, and BGN 9,7 M will go for the preparation for the liberalization of the market. EVN is the electricity provider for southeast and south-central Bulgaria.

Interhotel Sandanski invests BGN 1m in tennis courts

 

Interhotel Sandanski has not felt the crisis yet. Number of tourists grew by 10% and 50% of all of them are Bulgarians. The hotel offers balneology and SPA and has invested over BGN 1 million in five first-class tennis courts with modern pavement found only in three or four other courts in Europe. The hotel aims at becoming part of the big international tennis tournaments. The business plan goal for 2009 is the construction of two pools with mineral water.

Holiday complex for € 25 M

 

The construction of a modern gated holiday complex started in the town of Sapareva Banya. Investor is BIG Sofia Holding OOD and investment amounts to EUR 25 million. The first projects include 52 two-storeyed houses and an apartment building on four floors. At the moment, we are working on the infrastructure, the general director of the holding said. Over EUR 2.5 million will be spent for a central collector, water pipelines and electric transmission network.

EU Moves to Sofia in 2018

"The EU will move into ultra modern offices in Sofia when in 2018 Bulgaria takes over EU Presidency. A governmental complex will be specially constructed for the purpose," Bulgaria's Prime Minister, Sergey Stanishev promised at a meeting with five of the biggest architecture agencies in the world. They will compete for the grandiose project along with an association of 19 Bulgaria studios. Yesterday the architects arrived to inspect the terrain and were personally welcomed by PM Stanishev. The complex will spread on 60 ha of land near Tsarigrasko Chaussee, the major arterial road in eastern Sofia. The complex will host not only the ministries and other state institutions but also a large number of buildings with different purposes like exhibition and concert halls, sports facilities, hotels, restaurants and cafes. "The idea is that this second Sofia's centre will throb with life all around the clock," explained Dimcho Mihalevski, Deputy Minister of Regional Development and Public Works.Six design teams will present their projects between April 22 and 24. They will be given full rein in creativity. An international jury of four foreign and three Bulgarian architects will evaluate the designs. The complex will be constructed by a public-private partnership, according to Mihalevski. The idea is that the state-owned property will be constructed at zero cost as big investors are expected to purchase the construction rights for the rest of the terrain.

 

Bulgaria’s first retail park opens in Plovdiv

Landmark Properties Bulgaria, the property investment and management company, cut the ribbon on the nation’s first retail park in Plovdiv, Bulgaria’s second largest city.The project stands on a 42 650 sq m plot and has a combined floor area of 26 400 sq m and a 450-car parking lot.The investment was in excess of 21 million euro, Landmark executive director Tanya Koseva-Boshova said.Rents range from 10 to 14 euro a square meter, depending on size and location of the outlet.One of the two buildings in the complex has been leased out to Austrian do-it-yourself chain bauMax.The second comprises eight stores of 600 to 2200 sq m each, an 850 sq m restaurant, and a 2000 sq m supermarket.Among the tenants are Greek clothing retailer Sprider, Bulgarian retailer of sporting goods and fitness equipment Sport Depot and household appliances retailer Technomarket.German shoe maker Deichmann and dm drugstores will enter the park in February to open their flagship Bulgarian stores.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANIES:

 

Bulgarian companies threaten to boycott banks

There are no tangible reasons for financial worries in Bulgaria and yet, for a couple of months now, the banks have been denying loans to small and medium-sized businesses. The news was spread by Svetlozar Nikolov, Chairman of the Bulgarian Business Association in the coastal city of Varna.'The banks just turn down loan applications of the companies without even bothering to consider their business projects,' he said. To his words, the Bulgarian authorities should prevent the mounting tension between the business and the banking sector. The Bulgarian Business Association has started a campaign appealing to the bankers to pay more respect to the business community.'Over 500 small and medium-sized companies have joined in our campaign. They will go bankrupt if the banks go on with their rigid crediting policy,' Nikolov said. Businessmen say that not a single sector of the Bulgarian economy experienced any troubles before the banks launched their inadequate crediting policy. To their words, the tension is artificially created and it presents an obstacle to the steady development of the Bulgarian economy. They also say that the current situation has very little if anything to do with the global financial crisis.

 

Gazprom to slash gas prices for Bulgaria by 40% in 2009

Gazprom will reduce the price of natural gas for their European customers by 30-40 per cent in 2009, in light of the global drop of the oil prices in recent months, which followed the unprecedented high prices in the summer of 2008, Gazprom Export executive director of Gazprom Ilia Kochevrin has said. But the news will come as little consolation to Bulgarian consumers, since the price drop will come after the end of the heating season.Kochevrin arrived in Sofia for a day's visit and met only with the the head of Parliament's budget committee and former economy minister Roumen Ovcharov and with selected members of the Bulgarian media. Ovcharov was the one to negotiate Bulgaria's current gas deal with GAzprom, signed in 2006, which runs until 2030.Kochevrin told reporters that it was impossible for the long term contracts to be amended or changed in any way, because their prices are calculated on the basis of average coding of natural fossil resources for six months or nine months backwards, and the corresponding prices of petrol on the global market.The formula is clearly described and is never altered under political influence or pressure: “There is not a single iota of politics involved, its simple really - if you pay, you get your gas,”  Kochevrin said. He added that “Bulgargaz has meticulously met its obligations to Gazprom time and again and always pays on time”. There is a decline in the supply of natural gas to Western Europe because of the global financial crisis and the decreased demand for the resource thereof.There was a certain minimum amount in the quantity of gas, a quota that must be ordered by countries, and they cannot order any less than the agreed amount, Kochevrin said. In other words, whether it uses or sells the quantity or not, Bulgargaz is still obliged to buy the quota in the first place, regardless of consequences afterwards.

 

 

Carrefour to move into Bulgaria despite crisis

France's Carrefour, Europe's biggest retailer, has not given up on the planned rapid expansion in Bulgaria despite the global economic slump, sources close to the company said. The chain has inked a contract to open a 10 000 sq m outlet in Rousse’s Grand Plaza shopping mall, which should be finished in 2010.Carrefour has been preparing for Bulgarian entry for a several years now, planning to debut in 2009 and build a 30-strong network of supermarkets and hypermarkets over the folowing five years.On November 18, Carrefour sacked CEO Jose-Luis Duran over tepid sales and said it will focus on expansion in emerging economies.Carrefour sold a retail centre under construction on Sofia’s Tsarigradsko Chaussee to Greek fund Assos Capital to follow up with a Bourgas shopping mall unloaded to Gort Holdings and Bridgecorp. The chain will own Carrefour supermarkets in both complexes.Carrefour, which has almost 15 000 hypermarkets and supermarkets in 30 countries worldwide, reported over 82 billion euro in sales for 2007.

Technopolis opens its 21st store

 

Technopolis hypermarket chain opened its 21st store in the town of Montana. It is located on 2,000 sq. m with 70 parking lots and offers over 25,000 white and brown goods for home and office and free delivery. In 2008, Technopolis invested over BGN 20 million for expanding its commercial facilities. Total investments for the last seven years have reached BGN 126 million and the staff numbers 1,900 people.

Bulgarian companies extract gas for Nabucco

Turkey will sell natural gas just for the transit fees Bulgarian companies would be licensed for extracting natural gas for Nabucco project.  Bulgarian businessmen will be able to take part in joint ventures and invest in the production of natural gas from countries where this fuel is abundant, the Standart learnt from sources from the delegation led by Bulgaria's President Georgi Parvanov who is on a two-day visit to Turkey.   Nabucco is a rival project to the Russian South Stream and is expected to start functioning in 2013 and transport gas from Turkey to Austria via Bulgaria, Romania and Hungary. Turkey assured Bulgaria gas will be supplied just in exchange for the transit fees,it emerged at the meeting of President Parvanov and Turkey's Prime Minister, Recep Erdogan who talked in the Swissotel in Ankara under tight security measures. By now Bulgaria has negotiated two billion cubic metres of natural gas on Nabucco project. Today Georgi Parvanov will make an official visit to Turkmenistan where an energy agreement is also expected to be signed.

Bank branches and offices in Bulgaria

The total number of branches and offices of the thirty banks registered in the country and offices of foreign banks stands at 2,929, a check-up conducted by Profit.bg shows. DSK Bank tops the ranking with 387 branches and offices. The banks also operates nine regional centers. UniCredit Bulbank ranks second with 259 branches and offices, followed by Central Cooperative Bank with 253 client ceters. UBB occupies the number four spot with 238 branches and offices in the country.Eurobank EFG also operates more than 200 customer centers. The bank owns a total of 231 branches and offices in Bulgaria. Bulgarian Development Bank, ING Bank and BP Paribas have two offices each in Bulgaria. Citi Bank, T.C. Ziraat Bankasi, Bank Leumi Romania and NLB West-East Bank operate one branch or office each. See the table for more details on the branch networks of the banks in Bulgaria:

Name	Branch/office
DSK Bank	387
UniCredit Bulbank	259
CCB	253
UBB	238
Eurobank EFG Bulgaria	231
Raiffeisenbank	187
First Investment Bank	160
Investbank	143
SG Expressbank	142
EIBank	136
Allianz Bulgaria	120
Alpha Bank	120
Piraeus Bank Bulgaria	89
ProCredit Bank	86
Municipal Bank	84
International Asset Bank	80
MKB Unionbank	60
Corporate Commercial Bank	38
Tokuda Bank	36
Emporiki Bank	26
D Commerce Bank	20
Teximbank	19
BACB	5
Bulgarian Development Bank	2
BNP Paribas	2
ING Bank	2
Citi Bank	1
T.C. Ziraat Bankasi	1
Bank Leumi Bulgaria	1
NLB West-East Bank	1
Total	2929

                               Source: Profit.bg

 

 

 

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

Bulgaria enjoys high economic growth

Despite the global financial crisis, Bulgaria's economic growth will reach 6.8% for the last trimester of 2008, according to a prognosis of the National Statistical Institute. In the period January-September 2008, the economic growth was seven percent. This has been the highest value of the GDP for twelve years now and it has been reported against the background of global financial worries that the Bulgarian business also feels. In the third trimester of 2004 and 2006 the growth of Bulgaria's economy was 7.1%. In this line of thoughts, Bulgaria is doing much better than the other European economies in the conditions of a global financial crisis. Bulgaria's GDP over the last trimester of the year is 18.61 billion levs, which is 2,430 levs per capita. The agriculture sector is the main booster of the country's GDP. Over the period July-September 2008, the sector reported a growth of 44.3%. The other sectors of the economy also report a growth, but a lower one compared to the same period of last year. For instance, the growth in the industrial sector is only 2.1%, whereas in the period July-September 2007 it was 14.3%. The service sector reported a growth of 6.4% for the third trimester of the year, whereas in 2007 it was 8.9%.

Frozen EU funds for Bulgaria catalyze the crisis

Would the crisis affect Bulgaria more seriously next year, what is the currrent status of the Bulgarian enterprises and how would the Bulgarian economy withstand the crisis? We addressed Minister of Economy and Energy Petar Dimitrov with these questions.Mr. Dimtirov, do you expect the recession in Western Europe to affect Bulgaria's economic growth and bring it down to zero or even worse?All the foreign forecasts for Bulgaria are rather optimistic - both those of Vienna Institute and of the Institute for International Monetary Affairs. No institution predicts negative growth for Bulgaria, even on the contrary. I hope that as long as we do not act against our own interest and do not participate in anti-Bulgarian propaganda ourselves, our country will continue to attract foreign investments. In this sense I woul refer to the most topical issue - the suspended EU funds.  In a situation of a financial crisis, the bitterest result from this sanction levied by the European Commission is the stain on Bulgaria's image.  This sanction gives investors a signal, not at all beneficial for Bulgaria. If this is the reason for Bulgaria to lose a billion euro of foreign investments, it will be a very hard blow.Do you think Bulgaria is some sort of the EU's scapegoat? I think that Bulgaria hardly plays such a significant role in the Union's affairs that portraying  Bulgaria as a black sheep would influence the vote of the European voter. Rather, to me, Bulgaria is seen as a kid in the big European family.

 

 

 

 

 

 

 

Industrialists propose measures to tackle the crisis

 

The Bulgarian Industrial Capital Association (BICA) also came out with a set of measures for reducing the effect of the global economic crisis in Bulgaria. Actions are planned in several areas – capital market, state regulation and regimes, as well as the overall economy environment. BICA also pushes for reassessment of the Encouragement Bank activities (renamed to Bulgarian Bank for Development) as to provide for further assistance to SMEs in the country. Dnevnik Daily reports.

Sopharma's secret: Higher incomes against crisis

 

Sopharma pharmaceutical giant that participates in calculation of Sofix, BG40 and BGTR30 indexes on Bulgarian stock exchange managed to raise its incomes despite the galloping financial crisis, the consolidated report of the company for the third quarter of 2008 showed. Total incomes rose by 37% to BGN 350.7 million. Financial incomes doubled and by end of September 2008 reached BGN 5.7 million. Sales incomes hold 98% of revenues for the nine months. Net incomes grew by 36.7% to over BGN 345 million by the end of the period. Between January and September 2008, profit was BGN 16.8 million, which is by BGN 9.9 million less on an annual basis. The main reason is the increased cost rate. Total expenses grew by 47% to BGN 331.17 million. In 2008, the pharmaceutical plant invested BGN 34.6 million in factories in Bulgaria and BGN 5.2 million in companies abroad. Doverie United Holding got the biggest financial injection amounting to BGN 25.7 million and another BGN 3.3 million were invested in Sopharma real estates REIT. New logistic centre for medicine storage that processes 300 containers a minute was opened on December 11, 2008. It is located on 10,000 sq. m and the investment amounts to EUR 10 million. This centre is a gain not only for Sopharma but also for the whole country, Bulgarian minister of healthcare Evgeni Zhelev commented.

 

Global financial crisis is external threat to Bulgaria

Author: Luchezar Bogdanov,Industry Watch analyst

At present, Bulgaria is not experiencing an economic crisis. The situation here is very different from the one in the USA or Western Europe, where people are suffering true recession, their incomes are shrinking and the economic growth of their countries is slowing down. Bulgaria's GDP will probably increase slightly in 2009, as well as the people's incomes. Over the past few years the Bulgarian Government had been avoiding macroeconomic risks by making rather conservative state budgets. Next year, too, the macroeconomic policy of Bulgaria will remain prudent and conservative. Bulgaria has been following a reasonable line of policy for ten years now and I see no reasons to change it.All negative influences to Bulgaria's economy will come from abroad. Of course, no one can tell what the economic situation in Europe will be over the next two years.Some analysts say Bulgaria's economy will see a zero economic growth, or even a negative one. There are moderate optimists who predict economic growth between one and two percent. And because the global economic situation is so unpredictable at present, we cannot tell how the crisis will affect Bulgaria's economy.

 

 

 

 

 

PM Stanishev: Bulgaria remains very stable amidst Global Financial Crisis

 

Bulgaria's Prime Minister Sergey Stanishev declared Thursday the country remained very stable financially and economically despite the raging global financial crisis.In a lecture at the Youth Economic Forum at the University for National and World Economy in Sofia, Stanishev explained the government had a thorough plan for protecting Bulgaria of the negative effects of the global financial crisis.According to the Prime Minister, one of the most important buffers that the cabinet had set in the 2009 draft budget was the budget surplus of 3%. Stanishev pointed out that in the last few years Bulgaria's budget surplus had doubled largely thanks to the consistent policies of the government in this respect.The PM stressed the fact that the cabinet had doubled the country's financial reserves, which currently stood at BGN 28 B. Stanishev also predicted Bulgaria's GDP growth in for all of 2008 would be 6,5%. He added the country was still enjoying a high level of foreign direct investments - almost EUR 5 B by October 2008.Bulgaria's Prime Minister said the cabinet would make up for the expected decline of foreign investments in 2009 by allocating BGN 5,6 B for capital expenditures in the real economy.In his words, each Ministry was going to come up with an investment plan in order to utilize the public funds in the first six months of 2009.

 

Global Financial Crisis to drive large construction companies out of Bulgaria

 

Bulgaria's 2008 top construction entrepreneur Nikolay Pehlivanov predicted Wednesday that the global financial crisis was going to drive large construction companies out of the Bulgarian market. In his words, the multinational companies and investment funds would be hit hard by the effects of the crisis because their costly large-scale projects would affect their competitiveness.At the same time, however, the crisis had decreased the cost of construction projects in Bulgaria by an average of 20% as the prices of construction materials and labor have gone down in the recent months.In addition, speculators are willing to reduce the prices of the real estate property by up to 50% in order to complete their deals quickly.However, Pehlivanov also predicted that the consumers would hardly see any decrease in the prices of the end products on the construction market because the entrepreneurs would not be willing to reduce the prices of the projects already under construction, and because few new projects were being launched.In his view, the construction companies would change their strategies by concentrating on small-scale projects, or on the gradual construction of large-scale projects. Pehlivanov said the construction companies that had made large initial investments but were late to realize their projects were the most threatened by the effects of the global crisis.Nikolay Pehlivanov is the CEO of Green Life Property Development. He has been selected Bulgaria's 2008 top construction entrepreneur by the Bulgarian Chamber of Construction Entrepreneurs.

Four European countries close their labor markets for Bulgarians

The Republic of Ireland will keep the labor restrictions for Bulgarian citizens for three more years. Because of the global financial crisis, the UK, Germany and Austria will also restrict the access of the Bulgarians to their labor market. Although the Bulgarian and Romanian citizens will need work permits to practice their professions in the Republic of Ireland, they will be employed with priority to non-EU citizens. At a meeting in Brussels, Austria's Social Minister Rudolf Hundstorfer told his colleagues that his country will open its labor market for Bulgarians and Romanians as late as in 2011. To his words, this move had been agreed with the German authorities, as well. The British Government said the labor restrictions for Bulgarians and Romanians would remain in force. The Dutch Parliament voted that the Bulgarian and Romanian citizens working in the territory of the Netherlands will not be entitled to unemployment aid if they lose their job. They will be thus encouraged to come back to their home country.

 

Bulgaria oils producer Prista Oil to boost exports as anti-crisis measure

 

The CEO of Bulgaria's motor oils producer Prista Oil Milen Boychev said Thursday the company was planning to expand its exports as a measure to tackle the effects of the global financial crisis."The past year was the most successful in our history", Boychev said as quoted by the Pari Daily. In his words, Bulgaria was going to feel the full-fledged effects of the global financial crisis in the first quarter of 2009. Many companies are expected to terminate their production temporarily, and the market is expected to shrink. Despite the crisis, however, Prista Oil does not plan curtail its production or exports; rather, it is going to attempt to boost them in order to overcome the potential bad effects of the crisis.The company is going to concentrate on its twenty-six export destinations, which include countries in Eastern Europe such as Romania, Hungary, Slovakia, Serbia, Turkey, the Ukraine, as well as a number of states in North Africa and the Middle East. Prista Oil is headquartered in Bulgaria's Danube city of Ruse. It produces 150 kinds of motor oils and industrial lubricants, including brands of Texaco and Valvoline.The company was founded in 1993 by the brothers Atanas Bobokov and Plamen Bobokov. In 1998 it merged with Monbat (located in the northwestern Bulgarian city of Montana), which is Bulgaria's major car batteries producer.Prista Oil has distribution companies in several Eastern European countries, as well as a production facility in Izmit, Turkey, and a terminal at the Black Sea Port of Odessa in the Ukraine.