불가리아 주요 경제뉴스 (9 – 16 September 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (9 – 16 September 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Foreign Tourists Spent E486,4 M in Bulgaria in July 2011

Drastic Slump in FDI Flows Beckons More Woes for Bulgaria

Consumer inflation slows to 4.1% y/y in August 2011

Foreign trade balance turns to surplus in July 2011

 

INVESTMENTS:

Road infrastructure agency prepares EUR 4.3bn projects

 

COMPANIES AND INDUSTRIES:

Software Industry Reports 5.3% Growth in 2010

Software market to rise this year – survey

Trace starts EUR 23.6mn repair of Mezdra-Novi Iskar road

Great Wall to start car production in Lovech by end-2011

Lufthansa Technik Sofia to double capacity by end-2012

Bulgaria's new vehicle sales grow 20% in Jan-Aug 2011

 

 

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Foreign Tourists Spent E486,4 M in Bulgaria in July 2011

The foreign tourists in Bulgaria spent nearly half a billion euro in July 2011, which is 11,2 million euro more compared to the same period of 2010, shows the data of the Bulgarian National Bank (BNB). This money comes in the core of the record-breaking surplus in the current account of the balance of payments in July 2011 - 643 million euro unprecedented for the last 14 years. This figure is about 110 million euro more compared to the same period of 2010. Bulgaria’s export rate is also improving and for the first time it shows better results than import. In contrast to the exporters, Bulgarian emigrants now ensure significantly less resources. The money sent back home by Bulgarian emigrants in July 2011 total 121 million euro compared to the 149 million euro in July 2010. The foreign investments in Bulgaria also decrease. In July 2011 they amounted to 84 million euro which is nearly 130 million euro less than in the same period of 2010. The foreign investments in Bulgaria for the first 7 months of 2011 reach 184 million euro, which is a drop by 76% on a y/y basis.

 

Drastic Slump in FDI Flows Beckons More Woes for Bulgaria

Bulgaria attracted a mere BGN 183.8 M in foreign direct investments in the first seven months of 2011 compared to BGN 776 M the same period last year, central bank data showed. The most noticeable withdrawal of capitals is performed by companies in Germany, Great Britain and Japan. The top investors in Bulgaria now are the Netherlands, Cyprus and Russia. Analysts have attributed the negative trend to the crisis fallout - the uncertainty reigning in the euro area and the European Union as a whole, the government's conflicting messages, deteriorating public finances and outstanding payments on intercompany loans. They have expressed serious doubts that the forecast of 3.6% growth projected by the Bulgarian government in its 2011 budget is realistic. "If this target is achieved, it will be only thanks to exports and rising international prices. But this does not fix the problems of our economy," said Bozhidar Danev, head of the Bulgarian Industrial Association (BIA). According to him the drastic decline in FDIs will lead to even bigger problems in the labor market and thus to further contraction of consumption. "Foreign capital will not come to us until we significantly improve the business environment and introduce the e-government. Such things can not be fixed with good PR only", said Danev.

 

Consumer inflation slows to 4.1% y/y in August 2011

Consumer price inflation decelerated to 4.1% y/y in August from 4.4% y/y in July, statistical office data showed. on a monthly basis, consumer prices fell by 0.3%. Food prices continued the downward trend during the month on seasonal effects. The prices of clothing and footwear, home appliances, and free-time activities also declined. Since the beginning of the year, the consumer price inflation has reached 1.5%. The EU harmonised inflation index (HICP), used as a benchmark for the euro adoption, also slowed to 3.1% y/y in August from 3.4% y/y in July. In monthly terms, it fell by 0.1% after increasing by 0.4% m/m a month earlier. 

Foreign trade balance turns to surplus in July 2011

Foreign trade balance turned to surplus of BGN 99.2mn (EUR 50.7mn) in July as compared to deficit of BGN 90.7mn a year earlier, according to preliminary data of the statistical office. Thus the trade deficit since the beginning of the year narrowed to BGN 1.15bn (1.5% of the full-year GDP forecast), down from BGN 1.25bn in H1 (1.6% of GDP) and BGN 2.74bn (3.9% of GDP) in Jan-Jul last year. The trade balance with EU countries was positive at BGN 159.5mn in July (down from BGN 185.3mn a year earlier) while the trade gap with non-EU countries plunged to BGN 60.3mn as compared to BGN 276mn in July 2010. In July 2011, exports increased by 21.1% y/y to BGN 3.59bn speeding from revised 12.9% y/y in June but still lower than above 35% y/y in the previous two months and 56.2% y/y in Q1. The rebound was due to recovery of the sales to non-EU countries, which went up by 32.7% y/y after a one-off drop of 2.1% y/y in June. At the same time, the growth of exports to EU countries slowed further to 14.8% y/y from 23.1% y/y in June and nearly 40% y/y in the previous two months. Imports totalled BGN 3.49bn in July, up by 14.2% y/y, slowing from 15.1% y/y in June and 21.4% y/y in May. Exports growth reached 36.9% y/y in Jan-Jul while imports were higher by 23.3% y/y, respectively. 

INVESTMENTS:

Road infrastructure agency prepares EUR 4.3bn projects

The state road infrastructure agency has started the preparation of projects with indicative value of EUR 4.26bn, investor.bg reports. The projects should be ready by the end of 2013 to be proposed for financing with EU funds in the next programming period 2014-2020. Some of the larger projects comprise Hemus Motorway (280km, EUR 1.25bn), Struma Motorway segment (62km, EUR 910mn), Black Sea Motorway (100km, EUR 450mn), speed road Rila (143km, EUR 420mn), and the Makaza passage (195km, EUR 382mn). However, some of the projects will fail or will be financed with potential loans from the European Investment Bank as transport minister Ivailo Moskovski expects EU financing for road and railways to be less than EUR 3bn in 2014-2020 (up by 15-20% as compared to the financing in the current programming period 2007-2013). 

 

COMPANIES AND INDUSTRIES:

Software Industry Reports 5.3% Growth in 2010

The software industry reported a 5.3 per cent growth in 2010, according to an Industry Barometer. The survey was presented Wednesday at BTA's National Press Club by the Bulgarian Association of Software Companies (BASSCOM). Polled companies said their sales grew 8 per cent between 2008 and 2010. According to National Statistical Institute data, software sales in 2009 totalled 429 million leva. The industry employed 7,995 people. Half of sales were concluded abroad, said Georgi Brashnarov, Chairman of BASSCOM's Board of Directors. Over 80 per cent of companies that took part in the survey project a growth in sales in 2011, with 54 per cent of respondents expecting a growth of more than 15 per cent. Over 70 per cent expect more jobs, while 87 per cent believe that their wages will increase.

 

Software market to rise this year – survey

A total of 81% of the software companies, participating in a survey performed by Germany’s GOPA Consultants held in the period from March through May 2011, expect their sales to increase this year and 54% of the companies see the growth reaching 15%, investor.bg informs. Some 70% expect an increase in the staff while 87% of the respondents say the wages of the software specialists will go up. The sales of the software companies from the survey increased by 5.3% to BGN 163.3mn (EUR 83.5mn) in 2010 speeding from 2.6% in 2009 or by 8% in the period 2008-2010. The companies, which took part in the survey, account for 38% of the overall software market in terms of sales and 31% in terms of job positions. 

 

 

Trace starts EUR 23.6mn repair of Mezdra-Novi Iskar road

Trace Group Hold, one of the country’s main players in the road construction sector, announced in a note published on the website of the local bourse that it has started the repair of the road between Mezdra and Novi Iskar. The length of the road is 81.8 kilometres. The price of the contract is EUR 23.6mn. The European Investment Bank and the state budget provided the financing. The project should be completed in 24 months. 

Great Wall to start car production in Lovech by end-2011

Chinese car maker Great Wall is to inaugurate production of cars at its plant in the central Bulgarian city of Lovech by the end of this year, investor.bg reports. In mid-October, the company will open 12 representative offices in the country, which will start selling cars produced in China initially. The annual production capacity of the plant, in which will work some 2,000 employees, will be 50,000 cars. The investment in the car-assembling facility is to reach EUR 80mn. The project is implemented in cooperation with local Litex Motors. 

Lufthansa Technik Sofia to double capacity by end-2012

In line with earlier information, Lufthansa Technik Sofia, a joint venture of Germany’s Lufthansa Technik and Bulgarian Aviation Group, plans to double its airplane repair facilities by the end of 2012, located at the airport in the capital city of Sofia, investor.bg reads. The investment will exceed EUR 20mn and will open 25 new permanent jobs. As a result, Bulgarian Aviation Group will raise its stake in the enterprise from 20% to 25%. The facility for simultaneous repair of two airplanes was opened in October 2008. After the expansion, the annual repair capacity of the base will reach 60 airplanes. 

Bulgaria's new vehicle sales grow 20% in Jan-Aug 2011

Sales of new motor vehicles in Bulgaria grew by 20% year-on-year in the first eight months of 2011, according to Association of Car Manufacturers and Authorised Representatives figures. Between January and August, Bulgarians bought 14,086 passenger cars and light commercial vehicles, 851 buses and lorries and 279 motorcycles. Sales of buses and lorries soared 77% on an annual basis mainly because of the higher number of purchases of new lorries, while sales of cars rose by 19%. Volkswagen was the most popular brand in the car market with an 11% market share, followed by Ford with 9.02% and Toyota with 8.61%. In August alone, Bulgarians purchased 1,809 cars, 125 buses and lorries and 25 motorcycles.

 

 

 

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea