불가리아 주요 경제뉴스 (24 June – 1 July 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (24 June – 1 July 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Ø  Ernst & Young Expects Bulgaria's GDP to Grow by 3.2% in 2011

Ø  Bulgarian economic growth to slow down in coming months – UniCredit

Ø  Bulgaria to build Hemus Motorway, four high-speed roads with EU funds - report

 

 

INVESTMENTS:

Ø  Agropolychim JSC with an investment programme worth BGN 100 mln

Ø  EBRD, Bulgaria Sign Three KIDSF Grant Agreements

Ø  Bulgarian-German Firm BCI to Invest EUR 200 M in Bulgarian Solar Park

 

COMPANIES AND INDUSTRIES:

 

Ø  Battery producer Monbat's sales up 19.1% y/y in Jan-May 2011

Ø  Bulgaria's cigarette sales fell 23% in January-May

Ø  ZBS launches construction of EUR 40mn trade centre in Burgas

Ø  Bulgaria to link Maritsa East 2 power plant to Plovdiv, Bourgas

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Bulgarian economic growth to slow down in coming months - UniCredit

Bulgaria's economic growth will slow down in the coming months in light of its weak recovery and the sluggish growth outlook for global markets, according to UniCredit's latest CEE report. Nevertheless, the analysts projected that the rise in the country's gross domestic product (GDP) will accelerate to 3.3 per cent in 2012 from 2.8 per cent in 2011 on the back of lower inflation, which will in turn facilitate the recovery of household spending. UniCredit also expects that Bulgaria will enjoy low inflation levels throughout the whole 2012, accompanied by slow revival in domestic demand but still relatively high unemployment. For the rest of 2010, however, Bulgaria's inflation will remain a concern despite some signs of improvement, the analysts said. on an annual basis, consumer prices will reach their peak in June and July, when inflation is expected to reach six per cent before cooling down to four per cent by year-end," according to the report. The more efficient absorption of EU funds and potential permanent solution to Greece's public debt crisis, which currently curbs capital flows to the Balkans, will provide for an increase in investments to Bulgaria in 2012, UniCredit said. As to public finances, the analysts project that the country Budget deficit will be reduced to below three per cent of GDP in 2011.

 

Ernst & Young Expects Bulgaria's GDP to Grow by 3.2% in 2011

Bulgaria was hit hard by the crisis in 2009, with GDP contracting by 5.6 per cent, and despite initial hopes the economy grew only 0.3 per cent in 2010, a very weak recovery, the Ernst & Young consulting firm says in a report. But the disappointing result last year was in large part due to a steep 3.2 per cent decline in GDP in Q4 2009 - quarterly growth actually averaged 0.9 per cent in 2010. However, GDP rose just 0.5 per cent in Q1 2011, lower than the 2010 average, due to very weak private and public consumption, although exports continued to rise strongly with quarterly growth of 4.6 per cent.

Ernst & Young forecast GDP growth of 3.2 per cent in 2011, before picking up to 4.8 per cent in 2012 and 5.6 per cent in 2013. These good prospects are partly based on the large catch-up potential of the Bulgarian economy and its strong pre-crisis performance.

But risks to the forecast remain skewed to the downside, stemming mainly from uncertainties about external developments. These particularly relate to increased turbulence on European sovereign debt markets, with a restructuring of Greek sovereign debt looking increasingly likely. Unless this is handled well by the European authorities, then the repercussions for the EU could be severe. An uncoordinated Greek debt restructuring could lead to a considerable tightening of credit provision throughout the Eurozone, with the impact in Bulgaria being felt both via increased stress in its banking sector and via reduced demand for its exports.

A further negative impact could be a severe delay in the recovery of FDI. Indeed, since global liquidity evaporated, FDI inflows plunged from 30 per cent of GDP in 2007 to just 4.5 per cent of GDP in 2010, and indeed there was a small net outflow in Q1 2011. Given limited global appetite for risk, it is unlikely that FDI inflows will approach pre-crisis levels again for some time. Further tightening following an uncoordinated Greek debt restructuring would delay any recovery of FDI, in turn holding back the recovery, the report further states.

Bulgaria to build Hemus Motorway, four high-speed roads with EU funds - report

The construction of Bulgaria's Hemus Motorway and four high-speed roads linking the country's borders with its central regions will cost three billion euro, of which 2.5 billion euro will come from EU programmes, Regional Development Minister Rossen Plevneliev said on June 30 2011. The projects will be backed with EU funding as they have been included in the Trans-European Transport Network (TEN-T) programme, Plevneliev said, as quoted by news website vNews. Apart from the Hemus Motorway linking the capital Sofia with the Black Sea city of Varna, the projects include the high-speed roads connecting the northeastern cities of Rousse and Shoumen, Varna and Durankulak, also in the northeast, Plovdiv - Asenovgrad - Roudozem in southern Bulgaria and the Rila high speed road (Kyustendil-Doupnitsa-Samokov) in the west. The European Commission has added seven motorways and seven high-speed roads in Bulgaria to the updated European transport network, which should be all completed by 2020, Plevneliev said. Among the projects included in the scheme are the Lyulin, Trakia, Maritsa, Strouma and Cherno More motorways and the high speed roads linking Vidin-Botegvrasd, Rousse-Makaza and the Gyueshevo border checkpoint to Sofia. According to Government estimates, the development of all transport projects will cost a total five billion euro.

 

INVESTMENTS:

 

Agropolychim JSC with an investment programme worth BGN 100 mln

A total of BGN 20 mln were invested in the construction of the sewage treatment plant

The investment programme of Agropolychim JSC until 2013 is worth BGN 100 mln, announced in the town of Devnya on Monday, the plant's CEO Philippe Rombaut during the inauguration of the company's new waste-water treatment facility, BIA said and cited BTA. The event was attended by the Minister of Environment and Water, Nona Karadjova, as well as by the Ambassador of the Republic of Denmark to Bulgaria, Kore Erhard Janson. A total of BGN 20 mln were invested in the construction of the sewage treatment plant, while the investment programme also provides for the construction of a new depot for phosphogypsum waste worth BGN 16.5 mln, as well as for an installation for the production of stabilised ammonium nitrate (SAN) worth BGN 30 mln. It should become operational by the end of 2011. Besides, the company plans to reconstruct a department in the workshop for ammonia processing in which around BGN 5 mln will be invested. In March 2012, the construction of a warehouse for storing liquid ammonia will be launched - a total of BGN 30 mln will be invested in it. The facility should be ready by May 2013, announced Rombaut.

 

EBRD, Bulgaria Sign Three KIDSF Grant Agreements

Bulgaria and the European Bank for Reconstruction and Development signed on Tuesday three grant agreements totalling some 74 million euro ($105.8 million). The funding comes from the Kozloduy International Decommissioning Support Fund (KIDSF), which is administered by EBRD, Energy Minister Traicho Traikov told reporters during the signing ceremony. KIDSF was established in 2001 to support projects for restructuring and upgrades in Bulgaria's energy sector, thus compensating the country for the decommissioning of two pairs of reactors at its sole nuclear power plant Kozloduy. The allocations from the grants will be used in the process of the further decommissioning of Kozloduy's units, as well as to expand the country's transmission grid and also to upgrade Sofia's central heating network.

 

Bulgarian-German Firm BCI to Invest EUR 200 M in Bulgarian Solar Park

Bulgarian-German company BCI OOD is going to invest over EUR 200 M in aphotovoltaic park in the Kazanlak Municipality in Central Bulgaria. The solar power park will be located in three villages in the municipality – Yasenovo, Cherganovo, and Golyamo Dryanovo. The investment decision has been finalized after the Kazanlak Town Council voted to provide BCI with a construction permit right for 30 years, the Stara Zagora Chamber of Commerce announced. To enjoy the construction right for the photovoltaic park, BCI will pay the Kazalnak Municipality BGN 1.936 M, a sum equal to the taxation estimate of the value of the agricultural land, or about BGN 1 100 per decare of land. According to Nedko Mladenov, CEO of BCI OOD, the investment will open 1000 new jobs for a period of one year, while the construction of the solar park lasts, plus 100 permanent jobs after that for the maintenance of the photovoltaic power plant during its 30-year period of operation. Once it is realized, the BCI investment will be larged foreign direct investment in the Kazalnak Municipality of all time.

 

 

COMPANIES AND INDUSTRIES:

 

Battery producer Monbat's sales up 19.1% y/y in Jan-May 2011

The net consolidated sales of Bulgaria’s largest car battery producer Monbat increased by 19.1% y/y to BGN 82.1mn (EUR 42mn) in Jan-May and by 14.9% y/y to BGN 13.1mn in May alone, according to information posted on the website of the local stock exchange. The pre-tax profit of the company went up by 16% y/y to BGN 10.1mn in Jan-May but decreased by 0.4% y/y to BGN 1.5mn in May. The consolidated results comprise those of Monbat and its unit Monbat Recycling. In April 2010, Monbat decided to spin off its recycling operations in order to improve its efficiency and make its activities more attractive to potential foreign investors. Earlier this month, Monbat opened a EUR 13mn used batteries recycling plant in Romania called Monbat Recycling Romania. 

 

Bulgaria's cigarette sales fell 23% in January-May

Bulgaria's legal cigarette market shrank 23 per cent in the first five months of 2011, with sales totalling 3.57 billion pieces, data by local tobacco companies show. According to preliminary estimates, Bulgaria's shadow cigarette market reached about 40 per cent in the period. May proved to be the single month so far in 2011 to stage a rise in official sales of cigarettes to 733 million pieces from 669 million pieces reported the previous year. The increase, however, was not attributed to higher sales in the period, but came as a result of the considerable decline registered in May 2010, prompted by the spike in prices of cigarettes following the rise in excise duty. "In the five months through May there has been stabilisation and an upward trend in sales on the legal market of slightly more than seven per cent," major tobacco producer Bulgartabac said. Bulgaria's official sales of cigarettes plunged to 10.4 billion pieces in 2010 from 19.1 billion pieces in 2009.

 

ZBS launches construction of EUR 40mn trade centre in Burgas

ZBS, an investment manager and a developer of lifestyle shopping centres in Bulgaria, will launch the construction of a trade centre in the southern Black Sea city of Burgas this week, investor.bg reported. The investment is estimated at EUR 40mn. The rented area will amount to 30,000 sqm. The trade centre, named The Strand, is expected to be completed in the summer of 2012. ZBS, one of the main investors in the complex, informs that a total of 44% of the trade areas have already been rented. The complex will comprise also cinemas, bowling, restaurants and children areas (some 35% of all the area). At the end of 2008, ZBS announced plans to build trade centres in the country for a total of EUR 200mn. 

 

 

Bulgaria to link Maritsa East 2 power plant to Plovdiv, Bourgas

Bulgaria will build two 400 kV power transmission lines connecting the country's coal-fired power plant Maritsa East 2 with substations in Plovdiv and Bourgas by the end of 2014, Economy Minister Traicho Traikov said on June 28 2011. As much as 37.8 million euro of the financing will be provided by the Kozloduy International Decommissioning Support Fund, operated by the European Bank for Reconstruction and Development (EBRD), while the remainder will be funded by state-owned electricity utility National Electricity Company. The agreement on the project financing was signed by Mikail Andonov, the newly-appointed head of the state-run power utility, and EBRD's nuclear safety department head Vince Novak. The project will provide for a reduction in electricity losses along the grid and also ensure secure supplies, Traikov said. According to the agreement, the transmission lines linking Maritsa East 2 with the substations in Bourgas and Plovdiv will cost 32.4 million euro and 21.6 million euro, respectively. EBRD set up the Kozloduy fund in 2001 to compensate the country for decommissioning four 440MW reactors at its sole nuclear power plant at Kozloduy. Bulgaria has so far contracted about 575 million euro worth of financing from the bank. EBRD also agreed to grant an additional 34 million euro to the nuke plant to fund the decommissioning of the plant's first four reactors, which will go for the remuneration of 715 workers at Kozloduy and State Enterprise Radioactive Waste engaged in the procedure.

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea