불가리아 주요 경제뉴스 (29 July – 5 August 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (29 July –  5 August 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Bulgaria's economy grows 2% in Q2 2011 - think tank

Bulgaria's consolidated budget gap shrinks to EUR 332m in H1 2011

Industrial PPI growth speeds to 10.1% y/y in June 2011

 

INVESTMENTS:

EBRD lends EUR 25mn for Sofia city public transport

EU Funds Minister: Bulgaria Should Get at Least Lv 16,500 Mln in EU Financing

 

COMPANIES AND INDUSTRIES:

 

Bulgaria's public companies display sustained recovery in H1 2011

Bulgaria's Globul reports 4.2% Y/Y decline in revenue in Q2 2011

Bulgarian rolling mill reports growing output

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

Bulgaria's economy grows 2% in Q2 2011 - think tank

Bulgaria's gross domestic product (GDP) is seen to have increased by about two per cent in the second quarter of 2011, estimates by the Centre for Economic Development (CED) showed. Bulgaria's economy is definitely heading for growth, but it is still weak and unstable, the analysts said in its quarterly report. The rise in GDP was mainly fuelled by the manufacturing and services sectors. According to CED, the country's overall economic growth will accelerate in the third quarter of the year on an annual basis, with a projected growth rate of between 2.5 per cent and three per cent in 2011. The recovery in the global economy was the main driver of the continuing dynamic development of the country's foreign trade. The total value of exports (FOB) reached 8.025 billion euro in the first five months of the year, rising by 47.2 per cent in nominal terms against the same period of 2010. Imports (CIF) grew at a slower pace (25.6 per cent) and stood at 8.885 billion euro between January and May. The difference between the growth rates led to a reduction in the trade deficit (FOB/CIF) to 860 million euro in the first five months of 2011 from 1.62 billion euro in 2010. The European Union remained the country's major foreign market, accounting for 60.7 per cent of its total exports, with Germany, Italy, Romania, Greece and Belgium continuing to be Bulgaria's major trading partners. The inflow of foreign investments is expected to remain weak in the coming years unless the country promotes new profitable sectors of the real economy to replace industries currently favoured by investors - real estate, finance and services, according to CED. The analysts project that foreign investments this year will not exceed the amount secured the previous year, 1.6 billion euro, but could be even lower. Inflation is seen to reach up to 4.5 per cent this year, while unemployment will be about 9.5 per cent.

Bulgaria's consolidated budget gap shrinks to EUR 332m in H1 2011

Bulgaria's Budget deficit contracted to BGN 649.7 million (USD 470.8m/EUR 332.2m) in the first half of 2011 from BGN 1.514 billion in the same period of the previous year, the finance ministry's consolidated report showed on Monday. The figure is 0.9% of the country's gross domestic product (GDP) forecast in 2011, against 2.2% registered in 2010. In June alone, the budget ended up in a deficit of BGN 52.7 million. Revenues rose by 7.69% on a consolidated basis to BGN 12.04 billion, or 46% of the volume projected for the entire 2011. Total spending amounted to BGN 12.69 billion, about 45% of the government's target. Value-added tax (VAT), the largest contributor to the budget, stood at BGN 2.91 billion, accounting for 45% of the planned amount. Excise receipts made up BGN 1.7 billion, again 45% of the target. The slowdown in indirect tax collection, which is contingent on the pace of consumption in the country, was partially mitigated by direct tax revenues - the corporate revenue tax and flat income tax paid by individuals, where the rate of collection reached 58% and 51% of the target, respectively. 

 

Industrial PPI growth speeds to 10.1% y/y in June 2011

The industrial producer price index (PPI) increased by 10.1% y/y in June, speeding slightly from revised 9.9% y/y in May, statistics office data showed. In monthly terms, producer prices rose by 0.1% after the one-off monthly contraction in May. The price growth of food products continued accelerating and metal extraction inflation nearly doubled to 14.2% y/y. The price increase in energy products remained the highest - at 15% y/y on base effects after the administrative corrections of the prices of natural gas, heating and electricity as of July 2010. The price increase of intermediate goods continued decelerating but the effect was counterbalanced by the prices of non-durable goods that had an increasing pressure on the overall index. The broader index including export sales decelerated further to 9% y/y in June as compared to 9.2% y/y in May and 12.5% y/y in April. 

 

 

INVESTMENTS:

 

EBRD lends EUR 25mn for Sofia city public transport

The EBRD is to provide a series of loans at the total amount of EUR 24.96mn to the capital city of Sofia to modernise the public transport system, the institution said on its website. Two loans have already been disbursed to the city of Sofia (EUR 5.96mn) and the municipal company Urban Mobility Centre (EUR 7mn) to support improvements to local traffic intersections, trolleybus services and tram lines as well as the introducing of an e-ticketing system across all public transport modes. Two other loans amounting to up to EUR 6mn each are to be signed shortly (with Sofia Electric Transport Company and Metropolitan) to provide the companies with necessary working capital for sustainable operations. 

EU Funds Minister: Bulgaria Should Get at Least Lv 16,500 Mln in EU Financing

During the next programme period 2014-2020 Bulgaria should receive at least 16,500 million leva in EU financing, EU Funds Minister Tomislav Donchev told journalists on Tuesday. He noted, however, that these are preliminary estimates and the amount of the funding will be specified in the following months. Currently, EU financing for this country totals some 13,000 million leva excluding national co-financing. The reform in the EU funds absorption envisaging the drafting of a special law and the establishment of a uniform managing authority for all operational programmes. However, the status of the managing authority has not been specified yet. It is yet to be decided whether it would be an agency, a ministry or a unit under the Council of Ministers. It is envisaged to establish six intermediary bodies on a territorial principle and these will work on all operational programmes. They will be distributed in the six planning regions. The idea is to re-locate part of the experts, based in Sofia, to other population centres. They will be stimulated by higher payments. Currently, junior experts draw a salary of 700 to 750 leva (the equivalent of 335-355 euro). According to Minister Donchev, however, the salaries of employees working within certain programmes, such as OP Transport, are inadequate. There is a green light for the opening of an office of the JASPERS Programme, Donchev also said. Bulgaria has received an official letter by the European Commission giving authorization to Bulgaria to sign contracts with the international financial institutions to use their services for the provision of technical aid. The econometric model HERMIN is already available to Bulgaria. Its main purpose is to study in advance the effect EU financing would have. The design of the Bulgarian version of the model cost about 20,000 leva and was developed within OP Technical Assistance. This model is very important for the next 2014-2020 programme period. It may be used to find alternatives and seek the maximum effect within the key economic indicators. Initially, it was used to calculate the effect of a possible full absorption of the funds within all operational programmes on the GDP for the 2010-2015 period. In this case GDP would increase by 9.5 per cent.

COMPANIES AND INDUSTRIES:

 

Bulgaria's public companies display sustained recovery in H1 2011

Bulgaria's public companies continued to recover from the crisis in the first half of 2011, but recorded lower profits because of higher raw material prices, according to their consolidated reports for H1 2011. Most, in particular export-oriented firms, reported bumper sales, but increases in profits lagged behind their growth pace. The slower rise in profits was attributed to the rapid increase in costs, in particular of raw materials. The increase mainly affected local manufacturers, which use chiefly metal, a commodity that displayed a significant spike in prices over the past year. In light of the intense competition, however, local firms chose to shrink margins instead of increasing the price of their production. As to companies active in the real sector, analysts project that the improvement will continue to the end of 2011. Dimitar Georgiev, a broker at Elana Trading, said that only companies with low indebtedness and operations abroad enjoyed good results. These firms are expected to sustain the positive momentum in their performance by the end of 2011. Hristo Vladimirov, a broker at TBI Asset Management, said that there was still uncertainty about whether businesses would be able to make progress, given signs of a slowdown in global economies. Apart from companies in the real sector, banks also registered satisfactory figures in the first half of the year, with 12 financial institutions recording a rise in profits, against eight in 2010.

Bulgaria's Globul reports 4.2% Y/Y decline in revenue in Q2 2011

Bulgarian mobile operator Globul, the country's second-largest carrier, recorded a drop in revenue for the tenth consecutive quarter, the company's financial report showed. The company blamed the unsatisfactory performance in the April-June period to the subdued consumption in the country, which resulted in a decline in Average Revenue Per User (ARPU) by more than 10 per cent. on a brighter note, the report showed a significant increase in the number of post-paid subscribers, as well a rise in mobile Internet users. Globul's revenue was down by 4.2 per cent to 101.4 million in the second quarter, while earnings before interest, tax, depreciation and amortisation (EBITDA) dropped by 6.8 per cent. In the first half of the year, revenue slid 5.7 per cent compared to the same period of 2010 to 197.8 million euro, while EBITDA totalled 82.7 million euro, down 8.3 per cent. "The challenging macroeconomic environment continues to result in sustained low levels of consumption in a market that is already nearing saturation," Globul said. The decline in Globul's second-quarter results was also attributed to the intense competition in the segment, which prompted a drop in prices of telecommunication services in the country.

 

Bulgarian rolling mill reports growing output

Bulgarian re-roller Promet Steel produced 145,300 tonnes of long products in the first half of 2011, the company tells Steel Business Briefing. The company’s output in May and June was 37,700 t and 38,400 t of long products respectively, which were, so far, the highest monthly volumes reported by the firm in the 2010-2011 period, SBB learns. Promet’s total annual capacity is 500,000 t of long products, such as rebar, equal angle, round bar and flats. The company sells its production into the domestic market but also exports, primarily to Romania, Serbia, Macedonia and Greece. The company denies media reports that claim it was to planning to begin making long products from S350 grade steel. However, the company "is considering the possibility of further expanding the assortment", SBB understands. Promet is located in Debelt, eastern Bulgaria, near the Black Sea port of Burgas. It is part of Ukraine’s Metinvest Group.

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea