불가리아 주요 경제뉴스 (12 - 19 August 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (12 - 19 August 2011)

 

Sections/headline briefs:

 

MACROECONOMY:

• Bulgaria's Wine Exports Rise 1.1% in H1, Domestic Sales Up 39%
• Bulgaria Sets up Balkan Energy Bourse
• Bulgaria's economy expands 1.9% Y/Y in Q2 2011
• Bulgaria's Economic Growth Ranks 11th in EU
• Consumer inflation slows to 4.4% y/y in July 2011
• Bulgarian Economy Hits the Breaks

 

INVESTMENTS:

COMPANIES AND INDUSTRIES:

• Bulgarian Mobiltel's revenue drops 7.9% Y/Y in Q2 2011
• Bulgarian Companies Move to Turkey

·         Bulgaria must seek new markets in southern Africa – BCCI

• Number of Tourists in Bulgaria Increases by 20%
• Kosovo to Import Foods from Bulgaria
• Sofia airport passenger traffic rises 3% y/y in Jul 2011
• Qatar Airways launches flights to Sofia as of September 14, 2011
• ERG Capital-1 signs deal to sell Commercial Centre Oriflame for EUR 1.6m
• Bulgarian Operations Boost Melrose Resources H1 Revenue

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

Bulgaria's Wine Exports Rise 1.1% in H1, Domestic Sales Up 39%

Bulgaria's wine exports rose by 1.1% and domestic sales jumped by 39% in the first half of 2011 as compared to the same period a year earlier, the country's agriculture ministry said on Wednesday. "In the first six months of the year wine exports amounted to some 216,466 hectolitres," the ministry said in a statement. Almost half of the exports, 49.2%, went to Russia, the statement added. Exports to Romania, the Czech Republic and Hungary saw a big increase. Domestic sales in the January-June period totalled 415,284 hectolitres.

 

Bulgaria Sets up Balkan Energy Bourse

Bulgaria will have to set up a power bourse teaming up with its neighbors. The future partners will be Serbia, Macedonia and Greece, the idea is to further include other Balkan states in the project. The HQ of the bourse will be based in Sofia, though. The reason is that Bulgaria rank first in the region in terms of power generation, on the other hand, its geographical location is the most advantageous. Currently Bulgaria works in close cooperation with Norway towards the establishment of the new institution, as the Nordic country has broad experience in free trade in power. So far it has been decided to use a so-called “pooled" model for the new bourse which allows facilitating the deals and slashing the price margins in different countries. It is expected that Bulgaria’s Kozloduy nuke and Maritsa Iztok thermal power plant will stir the highest interest as they offer most attractive prices. 

 

Bulgaria's economy expands 1.9% Y/Y in Q2 2011

Bulgaria's gross domestic product (GDP) expanded by 1.9% year-on-year in the second quarter of 2011, according to a a seasonally-adjusted flash estimate by the National Statistical Institute (NSI). In quarterly terms, the country's economy advanced by a scanty 0.1% in the period. The data confirmed analysts' forecasts that the economy growth had slowed in the second quarter after recording a robust 3.4% rise in the first three months of the year. The country's exports, which had been the main driver of the economic recovery the previous quarters, recorded a 0.5% quarterly decline between April and June. on a brighter note, investments, one of the major growth engines of Bulgaria's economy during the boom years, registered a 9.5% annual increase in the period. According to local analysts, the rise could be considered a sign for the recovery in the country's economy. "We had projected a 0.3%-0.4% growth in (investments) the previous quarter, but the positive surprise was the increased consumption," Kristofor Pavlov, chief economist at UniCredit Bulbank, said. Pavlov is upbeat about the third quarter of the year given the expected rise in the country's cereal harvest and the improvements in the tourism industry.

 

Bulgaria's Economic Growth Ranks 11th in EU

Bulgaria occupies 11th place in the EU in terms of economic growth, show the data of Eurostat. Bulgaria's GDP growth in the second trimester of 2011 is by 1.9% more compared to the same period of 2010. only ten EU member states register better score than Bulgaria. Estonia tops the chart with an economic growth of 8.4%, followed by Lithuania - 5.9%, Latvia - 5.7%, Sweden - 5.3%, and Austria - 4.1%. At the same time Portugal registers a drop of 0.9%. The economic growth in Bulgaria in the second trimester of 2011 is by 0.1% more compared to the first trimester of the same year. Fourteen EU states have scored better results than Bulgaria. Another ten countries have not voiced their scores yet.

 

Consumer inflation slows to 4.4% y/y in July 2011

Consumer price inflation decelerated to 4.4% y/y in July from 4.8% y/y in June, statistical office data showed. on a monthly basis, consumer prices remained flat. Food and clothing prices fell but the effect has been counterbalanced by the administrative upward corrections in energy prices as of July 1 as well as the higher fuel prices on the domestic market. The latter affected transport prices in a similar fashion. Since the beginning of the year, the consumer price inflation has reached 1.8%. The EU harmonised inflation index (HICP), used as a benchmark for the euro adoption, also slowed slightly to 3.4% y/y in July from 3.5% y/y in June. In monthly terms, it increased by 0.4% after falling by 0.3% m/m a month earlier. 

 

Bulgarian Economy Hits the Breaks

The economic growth in Bulgaria has slowed down. After the Country’s GDP boasted a y/y hike of 3.8-3.4 percent in two consecutive trimesters, in April-May the GDP has increased with only 1.9 percent, the National Statistical Institute (NSI) reported. It appears that only six months after the national economy showed signs of overcoming the crisis and went upwards now this tendency has slowed down. In the second trimester the GDP upped with only 0.1 percent as compared with the first trimester. This is the worst result since the beginning of 2010, when there were indications that the country coped with the economic downturn. To a great extent the positive trends were explained with shrinking export sales in the first and second trimesters, NSI commented. Set against the same period of the last year, exports keep on growing at a good pace, which is, however, much slower than in the first trimester. This cannon but have a negative effect on the GDP indices.

 

INVESTMENTS:

COMPANIES AND INDUSTRIES:

 

Bulgarian Mobiltel's revenue drops 7.9% Y/Y in Q2 2011

Bulgaria's biggest mobile operator Mobiltel recorded a 7.9% year-on-year decline in revenue to EUR 130.5 million (USD 187.7m) in the second quarter of 2011, the company said on Wednesday. The company's financial report for the three-month period includes the results of cable operators Megalan Network and Spectrum Net, which were consolidated into Mobiltel's structure in February. Its earnings before interest, tax, depreciation and amortisation (EBITDA) were EUR 76.9 million in the quarter, falling by 8% on the year. The company blamed the decline on the intense competition in the sector and the drop in revenue from fees for termination and in the average revenue a user, which decreased by 14.7% to EUR 7.3. Mobiltel recorded a robust increase in the number of mobile Internet subscribers to more than 161,000, while users of fixed broadband services were 95,700.

 

Bulgarian Companies Move to Turkey

Companies are leaving Bulgaria due to the lack of staff. Bulgarian companies are planning to move their business in neighbouring countries, because in spite of the high unemployment rate it is hard to find qualified workers, Kamen Kolev deputy chair of the Bulgarian Industrial Association announced. In his words, businessmen prefer mainly Turkey. Electronics, machine building and chemical industry are the lines of business that mostly move to other countries, Kamen Kolev explained. There is a great need of engineers, but just 20% of the students choose technical universities, officials from BIA said. BIA proposes to the government to stop financing of ‘useless departments’ and to support those careers, which are in demand on the employment market.

 

Bulgaria must seek new markets in southern Africa – BCCI

New markets for Bulgarian products in African countries must be sought, Bulgarian Chamber of Commerce and Industry (BCCI) representative for southern Africa Raicho Iliev said in a letter to BBCI chairperson Tsvetan Simeonov, the chamber said in a media statement on August 18 2011. An examination of business opportunities in Zambia by Iliev took into account that the country is part of the European Union’s "Everything but Arms" initiative, which benefits trade exchange with less developed countries for all goods except weapons. Iliev said that the government of Zambia, through the Zambian Development Agency founded in 2007, had come up with a number of initiatives to promote trade and investment. A liberalisation package included a significant reduction of import duties and other charges, the abolition of export taxes, introduction of market-determined exchange rates, as well as initiatives to promote exports. Zambia has one of the most liberal trade regimes in Africa, Iliev said. The country, of 12 million, had a multi-party democracy with a sound legal environment governed by the rule of law, he said. Zambia’s economy was based on copper mining and the government understood the need for diversification of economic activities, along with the need to use other elements of Zambia’s rich resources and to promote agriculture, tourism, precious stones and hydro-electric production. The chief executive of the Association of Commerce and Industry of Zambia,. Priscilla Chikvashi, had invited Bulgaria to participate in international trade fairs in Lusaka next year.

 

Number of Tourists in Bulgaria Increases by 20%

The tourists who visited hotels and mountain huts in Bulgaria over the second trimester of 2011 were by 19.4% more than their numbers in the same period last year, according to data from the National Statistical Institute. Total 1.356 million people were accommodated for the period. Half of the hotel-visitors were Bulgarians. Average guests stayed for 3.5 nights and the total number of night-stays was 4.5 million. According to the information from the Institute, the active hotels' time has increased by about 20% in the period from April to June compared to the same time last year. Hotel-keeping earnings have increased by both foreign (16.1%) and Bulgarian (10.3%) tourists. The average rates of hotel renting for the year have increased and reached 27%. 

 

Kosovo to Import Foods from Bulgaria

Kosovo would like to import food products from Bulgaria, announced Blerand Stavileci, Minister of Agriculture, Forestry and Rural Areas Development of Kosovo after talking with his Bulgarian counterpart, Miroslav Naydenov in Pristina. Kosovo seeks opportunities for foreign investments. ?We hope we will start a joint venture with Bulgarian participation,? Stavileci added. ?Bulgaria can export for Kosovo wheat, sunflower oil, dairy products, chicken, eggs, flour, sugar and grain products,? Bulgarian Minister, Miroslav Naydenov said. Kosovo has launched a policy towards facilitating administrative procedures for the business. Currently the main such obstacles are the veterinary and phytosanitarian certificates which are not synchronized between the two countries. The ministers promised that the Bulgarian Foods Safety Agency and Kosovo?s Veterinary Control Agency would start work on mending the situation. 

 

Sofia airport passenger traffic rises 3% y/y in Jul 2011

The passenger traffic at the country’s largest airport in the capital city of Sofia increased by 3% y/y to 336,500 passengers in July, the airport informed in a note on its website. The growth rate decelerated from 6% y/y in June and 8.4% y/y in H1. The number of passengers on international regular flights also rose by 3% to account for 90.6% of the total. The passenger traffic on domestic flights (to the Black Sea cities of Varna and Burgas) surged by 53% y/y to a 7.6% share in total while the number of passengers on charter tourist flights fell by nearly 19% y/y. The total cargo and postal packages serviced by the airport rose by 11% y/y to 1,435 tons. Earlier in the week, CEO Veselin Paykov said in an interview for Dnevnik Daily that the airport plans to expand the airfield and the passenger terminals to improve its infrastructure. The investment value has not been disclosed so far but the airport intends to cover it from its own financial resources. The airport expects to service a total of 3.5mn passengers this year, up by 6.1% as compared to 2010. 

 

Qatar Airways launches flights to Sofia as of September 14, 2011

Qatar Airways is to launch flights from Doha to the capital city of Sofia as of September 14, Dnevnik Daily reported. The company will operate four flights per week via the Romanian capital Bucharest, which Qatar Airways started servicing as of January this year. The flights to Doha will allow connections to more than 100 destinations all over the world. The five-star air carrier plans to run direct flights to above 120 destinations using more than 120 aircrafts by 2013. 

 

ERG Capital-1 signs deal to sell Commercial Centre Oriflame for EUR 1.6m

Bulgaria's real estate investment trust ERG Capital-1 has signed a preliminary agreement to sell its Commercial Centre Oriflame in Sofia for EUR 1.63 million (USD 2.3m), the company said without disclosing the name of the buyer. The preliminary agreement, however, may not result in a deal, as the contract has specific terms and if the buyer fails to fulfill them, the deal could be terminated. one of the conditions envisions the centre's upgrade for EUR 30,000, with the sum to be provided by the buyer. Commercial Centre Oriflame is near the interchange on the Tsarigradsko Chausse boulevard. In March, ERG Capital-1 sold its building of a hypermarket of the Praktiker chain on Tsarigradsko Chausse for EUR 10 million. ERG Capital bought the two properties in 2004.

 

Bulgarian Operations Boost Melrose Resources H1 Revenue

Production from Bulgarian fields boosted the first-half revenue of Scottish-based oil and gas company Melrose Resources, it said on Wednesday. "Revenue in the six months ended 30 June 2011 increased by 42% to $155.8 million (108.2 million euro) compared with $110 million for the six months ended 30 June 2010," Melrose Resources said in a statement. "This increase is due to production from the Kavarna and Kaliakra fields of $57.5 million, offset in part by the reduction in the revenues generated in the US due to the sale of the Permian Basin assets at the end of 2010," the statement added. Melrose Resources is active in oil and gas exploration, development and production with interests in Egypt, Bulgaria, Romania, France, Turkey and the United States. It has 100% interests in three production concessions and one exploration license in the Galata Gas Field, in the Black Sea, offshore Bulgaria.

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea