불가리아 주요 경제뉴스 (18 - 25 March 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (18 - 25 March 2011)

 

Sections/headline briefs:

 

 

 

MACROECONOMY:

Ø      BIA: Bulgaria's Exports Grow Thanks to Bigger Quantities

Ø  EBRD confirms GDP growth forecast at 2.6% this year

Ø  Foreign debt falls 2.9% y/y to EUR 36.3bn at end-January

Ø  Advertisement market declines 14% in 2010

Ø  Bulgaria Exported Record Amount of Honey in 2010

 

INVESTMENTS:

Ø  Infiniti Energy Holding to invest EUR 50mn in solar power park near Devnya

Ø  Cable operator blizoo to invest EUR 25mn this year

 

COMPANIES:

Ø      Lukoil agrees to freeze fuel prices for one month starting Mar 23

Ø      PVB Power Bulgaria to build 7 hydropower plants in Romania

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

BIA: Bulgaria's Exports Grow Thanks to Bigger Quantities

Some 60% of the growth of Bulgaria's exports is the result of an increase in the quantity of the exported goods, according to an analysis of the Bulgarian Industrial Association (BIA). BIA points out that in 2010 Bulgaria's export did manage to surpass the 2008 level – the highest recorded export the country had before it was massively affected by the global financial and economic crisis. Thus, in 2010, Bulgaria's exports amounted to BGN 30.5 B, which is BGN 7.6 B more than in 2009, or a 33.2% increase compared with 2009. Compared with 2008, Bulgaria's 2010 exports grew by 2.5%, or BGN 752 M, which shows that the 2009 collapse caused by the global crisis has been overcome, BIAsays in its analysis submitted to Finance Minister Simeon Djankov. While 60% of the export growth results from increase in exported quantities, the other 40% of the increase is due to changes in the average prices of the goods. There are increases of Bulgaria's exports in 92% of the major product categories, which is taken to mean that the producers have used the more favorable situation for Bulgarian products on the international markets. Eleven of the major product categories have seen export growth of more than BGN 100 M each; they make up 48% of the growth in Bulgaria's exports in 2010, and include:

Mineral fuels and oils – export growth by BGN 1.160 B (2010 compared with 2009);

Electric machines and equipment – BGN 483 M;

Grain – BGN 387 M;

Copper and copper products – BGN 320 M;

Plastic and plastic products – BGN 287 M;

Iron and steel – BGN 259 M;

Oil crops and fruit – BGN 237 M;

Fertilizers – BGN 153 M;

Car parts and tractors – BGN 116 M;

Aluminuim products – BGN 108 M;

Non-organic chemical products – BGN 106 M;

As far as the imports are concerned, BIA points out that the imports continue to grow by already at a slower pace. Thus, Bulgaria's 2010 total imports amounted to BGN 37.5 B, an increase of BGN 4.5 B, or 13.5%. There is growth in 70% of the main product categories, and the major factor forimport growth is the higher average prices of the imported products. The quantity increase is responsible for only 7% of the import growth worth. Fourteen of the main product categories saw import growth of more than BGN 100 M; they account for 76% of the import growth in 2010.

Mineral fuels and oils – Import growth by BGN 1.707 B (2010 compared with 2009)

Copper and copper products – BGN 1.017 B

Electric machines and equipment – BGN 475 M

Ores – BGN 474 M

Machinery and equipment – BGN 469 M

Iron and steel – BGN 439 M

Cars and tractors – BGN 267 M

Pharmaceuticals – BGN 165 M

Aluminum products – BGN 151 M

Timber and timber products – BGN 127 M

Plastic and plastic products – BGN 124 M

Sugar and sugar products – BGN 105 M

Cellulose – BGN 102 M

Iron and steel products – BGN 101 M

 

EBRD confirms GDP growth forecast at 2.6% this year

Chief economist of the EBRD Erik Berglof confirmed the January projection of the institution saying that the Bulgarian GDP will expand by 2.6% this year, dariknews informed. However, Berglof warned that the country faces a number of challenges and should adopt measures to contain the risks before the economic recovery. The country must also improve the business environment, improve the efficiency of the customs administration, remove some of the administrative barriers before the business, and facilitate the procedures to settle trade disputes. Berglof's comment regarding the capital markets was that thwy should improve in the whole region of EBRD operations.

 

Foreign debt falls 2.9% y/y to EUR 36.3bn at end-January

The gross external debt declined by 2.9% y/y and 1% in a month to EUR 36.3bn as of end-January, according to preliminary data of the central bank. The foreign liabilities of the public sector fell by 3.4% y/y to account for 11.3% of the total. The private sector reduced its foreign debt by 2.9% y/y as a result of the activity of the banking sector (contraction of the short-term deposits of foreigners and the credits of the local banking system). At the same time, the non-banking sector raised its exposition to foreigners through increase of both short-term and long-term loans, as well as intra-company loans. The total foreign debt accounted for 96.3% of GDP as compared to 103.8% of GDP a year earlier. The short-term debt, covering liabilities with original maturity of one and less than one year, was at 31% of the total, slightly down from 31.8% a year earlier and 31.4% in December. The credits on demand accounted for 25% of the total external debt (up from 23.8% at end-January 2010 and 24.7% as compared to end-December) and 63% of them were reported as inter-company loans. The ratio of foreign reserves to short-term debt deteriorated to 108.4% at the end of January from revised 112.8% at end-2010 but was higher than 104.6% at end-2009 and 96.5% at end-2008. However, it is still much weaker compared to more than 120% at end-2007 and about 300% in 2002-2004. The share of inter-company loans, which are not included in the short-term debt statistics, accounted for 40.8% of the total external debt, up from a month earlier (40.2%) and in annual comparison (39.1%). 

 

Advertisement market declines 14% in 2010

The advertisement market has declined by 14% to BGN 329mn (EUR 168.2mn) last year and the advertisement prices have fallen at the same rate, chairperson of the advertisement agencies chamber Krasimir Gergov informed quoted by investor.bg. The growth rate decelerated from 24.8% in 2009. The internet (share of 4%) was the only segment, which posted growth of 11% last year and is forecast to speed up this year. The net expansion of the online commercials went up by 5%. The gross value of the TV advertisement (65% of total last year) has remained flat at 2009 levels but in net terms has fallen by 10.5%. The main TV channels have cut the prices by 5% last year. The TV advertisement market is expected to increase by 7-10% this year. It has already started to rise in Jan-Feb. The newspapers and magazines segment (share of 16%) dropped 11%. Out-of-home advertising (share of 7%) declined by 12%. 

 

Bulgaria Exported Record Amount of Honey in 2010

Bulgaria exported a previously unrecorded amount of honey in 2010, according toGancho Ganchev, head of the National Beekeepers' Union. Bulgaria producers exported between 7 200 and 7 700 tons of honey in 2010 out of a total of 12-13 000 produced last year, Ganchev said at the opening of the international expo "Bee-Mania" in the northeastern city of Dobrich. "There has never been such an export of honey before. The export increased by 1 500 tons, with the first honey of rapeseed being produced," Ganchev stated. He commented that while the wholesale price of a kilogram of honey is BGN 3.8-4.2, it is going to rise gradually in the coming years because of the product's regular business cycle. There are some 700 000 bee families in Bulgaria but only about 2% of the bee keepers are doing it professionally, and not as a hobby. He also said Bulgarians' average annual consumption of honey increased from 400-500 grams to 500-600 grams.

 

 

INVESTMENTS:

 

 

Infiniti Energy Holding to invest EUR 50mn in solar power park near Devnya

Dutch company Infiniti Energy Holding will invest EUR 50mn in solar power installation near the north-eastern town of Devnya, state-run news agency BTA reported. The total production capacity of the plant will stand at 15 MW. The first part of the installation with 5 MW capacity should be built by the end of this year. Infiniti Energy Holding is interested also in wind power generators. It works with Solarpro, controlled by local mineral extracting company Kaolin. Solarpro runs a photovoltaic panel factory in the Danube town of Silistra. 

 

Cable operator blizoo to invest EUR 25mn this year

Cable operator blizoo will invest EUR 25mn this year in expanding its optical network and raising the internet speed, Dnevnik Daily reported. The optical network of the operator is available to about half of the households in the country, which are located in the larger towns. The company is developing a hybrid network based on optics and coaxial cable, which has covered so far 40% of the settlements in the country. Blizoo will expand it to Sofia, Varna, Plovdiv, Ruse, Dobrich, Burgas and Panagurishte and expects to reach 92% of the households by the end of the year. Swedish-owned private equity fund EQT V bought 70% in CableTel and 100% in Eurocom for more than EUR 200mn in October 2009 and a few months later started offering their services, including Internet, TV and fixed-line telephony, under the trade mark blizoo. EQT V announced plans to invest EUR 90mn in the development of the company, whose revenues are estimated to reach EUR 70mn a year. It will offer its services to some 500,000 subscribers in 90 towns and villages in Bulgaria and Macedonia. 

 

 

COMPANIES:

 

Lukoil agrees to freeze fuel prices for one month starting Mar 23

The finance ministry and Lukoil Bulgaria, the local subsidiary of Russian oil major Lukoil, have reached an agreement to prevent increases in the fuel prices in the next one month, the government informed in a note on its website. The agreement entered into power as of March 23. In addition, the government decided to implement two of the three discussed measures: to remove the bio-diesel component (3% of the volume at present) and to allow the private companies to store 40-day reserves and then reach the current level of 60 days again by April 2013. The first measure is estimated to cut fuel process by BGN 0.06 (EUR 0.03) per litre and finance minister Simeon Dyankov expects the total effect of the two at BGN 0.12-0.14. The cabinet abandoned the proposal to remove the excise tax on bio fuels. 

 

PVB Power Bulgaria to build 7 hydropower plants in Romania

The local arm of the Italian PVB Power is to build seven small hydropower plants in neighbouring Romania, Dnevnik Daily reported. The annual production capacity of the plants is estimated at 260mn KWh. The investment is expected to reach EUR 250mn. PVB Bulgaria is run by Italian Finest, PVB Group (Petrolvilla Group), Dolomiti ENERGIA and Azienda Energetica S.p.A. Etschwerke AD. PVB Power Bulgaria is building nine hydropower plants along the Iskar River through its subsidiary VETs Svoge (EUR 115mn) and five hydropower plants along the Maritsa River in southern Bulgaria (EUR 110mn). 

 

 

 

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea