불가리아 주요 경제뉴스 (23 - 30 December 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (23 - 30 December 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

• Bulgarian Govt Lowers VAT by 1% by 2013
• Bulgaria's Business Climate Stalls in December 2011
• Bulgaria PM: Not a Lev for Russia over Scrapped BA Pipe

 

 

INVESTMENTS:

 

COMPANIES AND INDUSTRIES:

 

• Bulgaria's VIVACOM Launches 100 Mbps Fiber-optic Internet in Varna
• Foreign Trips to Bulgaria Up 2.4% in Nov 2011 Y/Y
• Sofia Airport with EUR 16.5 million in CCB
• 2012 Energy Sector Priorities: Building Gas Interconnectors, Extending Kozloduy Units 5, 6 Service Life, Energy Efficiency

 

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Bulgarian Govt Lowers VAT by 1% by 2013

Bulgaria may soon become SE Europe's taxation heaven, as the government plans to lower the VAT rate in the country by one percent by 2013. This became clear from an interview of finance minister Simeon Djankov with the Standart daily. 
We will hardly be able to lower the VAT rate in the country to 18%, but a smaller step is more feasible, Djankov said. 
Most probably, the decrease will not be announced in advance, so that a possible contraction of domestic consumption could be prevented. According to Mr. Djankov, the Cabinet is mulling the establishment of taxation police, which to investigate cases of tax evasion and VAT fraud. The tax cops will have the right to collect evidence, carry out investigations and execute arrests. Their powers may be expanded, if the results of their work are encouraging.

 

Bulgaria's Business Climate Stalls in December 2011

The total business climate indicator in Bulgaria in December 2011 preserves its level from the previous month, and a reduction is recorded only in construction. The data was published Wednesday by the country's National Statistics Institute,NSI. The composite indicator "business climate in industry" in December increases by 2.1% in comparison with the previous month. This is due to the slightly more optimistic managers' expectations about the business situation of enterprises over the next 6 months. The present production activity is assessed as reduced, stocks of finished goods as raised and the expectations for production and employment over next 3 months, compared to opinions expressed in the previous month are also more unfavorable. In December the uncertain economic environment and insufficient domestic demand are the main factors limiting industrial activity, as the uncertain economic environment is still above its usual average value for the last 10 years (by 22.3%). The industrial entrepreneurs' expectations with regard to the selling prices in the sector are in direction of an increase over the next 3 months. In December 2011 the composite indicator "business climate in construction" decreases by 5.0%, due to the increased managers' pessimism about the present business situation of the enterprises. The assessments related to constructionactivity and production assurance with orders is also more unfavorable (the balance value of the indicators drop respectively by 10.1% and 8.4%) in comparison with the previous month. At the same time the construction entrepreneurs' expectations about the activity over next 3 months are not optimistic. Forecasts for employment in the sector are also in a direction of decrease. The uncertain economic environment and financial difficulties continue to be the main problems for the sector, although in the last month a decrease of their negative influence is observed. Concerning sales prices in construction, expectations are for preserving their level over the next 3 months. The composite indicator "business climate in retail trade" in December preserves its level from the previous month as managers do not expect a significant change of the business situation over next 6 months. The last inquiry registers some recovery of positive expectations for retail sales over next 3 months and expectations about orders placed with suppliers remain comparatively favorable. The main factor limiting the activity in the sector remains the uncertain economic environment whose negative influence increases and in the last month has reached its maximum value (81.5%) since the beginning of the retail trade survey. At the same time the inquiry registers strengthening of the negative impact of the second-most limiting factor "financial problems." Retailers' expectations regarding the sales prices are for a certain decrease over the next 3 months. In December the composite indicator "business climate in service sector" increases by 2.8%, compared to November, due to the slightly improved expectations about the business situation of the enterprises over next 6 months. However, for the next 3 months the entrepreneurs have unfavorable forecasts concerning demand for services and employment in the sector. Regarding the current situation, the inquiry registers a decreasing tendency in the demand and movement of the personnel. The uncertain economic environment is the most serious factor limiting the activity of the enterprises, followed by competition in the branch. At the same time, the negative influence of financial problems increases compared to the previous month. Regarding sale's prices in the service sector, the managers foresee reduction over next 3 months

 

Bulgaria PM: Not a Lev for Russia over Scrapped BA Pipe

Bulgaria has ruled out paying damages for terminating its participation in the Burgas-Alexandroupolis oil pipeline project, which dealt a killer blow to the Bosporus bypass link. "I deeply respect Mr Shmatko and want to wish him Merry Christmas and Happy New Year. But Russia will not pocket not even one lev from us for Burgas-Alexandroupolis project," Prime Minister Boyko Borisov said on Tuesday during his visit to the town of Ruse. The statement came a day after Russian Energy Minister Sergey Shmatko warned his country will take all legal measures available to make Bulgaria pay indemnities over the Burgas-Alexandroupolis oil pipeline project. "We will make a full legal assessment of Bulgaria's actions," said Russian Minister of Energy Shmatko, as quoted by RIA Novosti. "We will calculate the expenses made by companies in the project. Without all doubt, given procedures at hand, those costs will be claimed from the Bulgarian party," clarified Shmatko. Earlier in December, the Bulgarian government said it will leave the project, which involved building a pipeline through Bulgaria and Greece to transport Russian oilfrom the Black Sea to the Aegean, bypassing the Bosphorus. The Bulgarian government announced it is quitting Burgas-Alexandroupolis as not economically efficient, after months of sending negative signals as to its commitment to the project. All the same, Monday Russian Energy Minister Shmatko reiterated his position that the project as negotiated was in the best interests of all parties involved - Bulgaria,Greece and Russia. Bulgaria's Finance Minister Simeon Djankov has expressed confidence that the withdrawal will not force the country to pay anything more than its EUR 6 M outstanding dues on the project. Just Sunday, Bulgarian Economy and Energy Minister Traicho Traikov said he felt Bulgaria's quitting of Burgas-Alexandroupolis has not harmed Bulgarian-Russianenergy relations.

 

INVESTMENTS:

 

 

 

COMPANIES AND INDUSTRIES:

 

Bulgaria's VIVACOM Launches 100 Mbps Fiber-optic Internet in Varna

Bulgarian telecommunications company VIVACOM said on Tuesday it has added the city of Varna to its fiber-optic Internet coverage area. The company said in a press release it has deployed the necessary infrastructure in key areas in Varna and the service will gradually reach citywide coverage. The coverage area of the company's FiberNet service, which offers surfing speeds of up to 100 megabits per second, already includes 100,000 households in Sofia where the service was rolled out in the summer. VIVACOM is the trademark of the Bulgarian Telecommunications Company, Bulgaria's incumbent telecoms operator. The company offers a full range of telecom services - fixed and mobile telephony, broadband Internet and data transfer. Varna, Bulgaria's third biggest city, is located on the northern Black Sea coast.

 

Foreign Trips to Bulgaria Up 2.4% in Nov 2011 Y/Y

In November 2011, the number of arrivals of foreign visitors to Bulgaria was 2.4% more than the number of these trips in the corresponding month of 2010. The total number of foreign visits in November was 384 thousand, according to data of the National Statistics Institute, NSI, released Tuesday. The largest increase was registered in the number of visitors with holiday andrecreation purpose - by 6.2%. In November 2011, the arrivals of visitors from EU Member States rose by 1.4% in comparison with the same month of 2010. The highest growth in the number ofvisits was observed from France and Italy – by 10.3% and 10.0% respectively. A decrease in the visits was registered from Lithuania - by 10.4%, Slovenia - by 5.5%, Malta - by 5.0%, etc. Visits of foreigners from the group "Other European countries" increased by 1.3%. The largest growth in the number of arrivals of citizens was observed from Switzerland - by 18.0%, Ukraine – by 13.6%, and Russian Federation - by 9.8%. In November 2011, visitors passing transit had the greatest share of the total number of foreigners who visited Bulgaria - 34.9%, followed by arrivals with holidayand recreation purpose - 33.2%, professional purpose - 17.1% and others - 14.8%. In November 2011, the number of the trips of Bulgarian residents abroad was 253.8 thousand, which was 1.1% more than the number of the trips in November 2010. An increase in the total number of the trips was registered to: Luxembourg - by 9.1%, Slovenia - by 6.8%, Finland - by 4.5%, Cyprus – by 4.5%, Germany - by 4.3, Spain - by 4.2%, Hungary - by 3.3%, Greece - by 3.2%, and etc. At the same time a decrease was observed to: Canada - by 29.5%, USA - by 29.0%, Portugal - by 28.7%, Lithuania – by 15.8/%, Switzerland - by 15.5%, Russian Federation - by 14.7%, and etc. The highest share of the trips of Bulgarian citizens travelling abroad was of those with professional purpose - 49.6%, followed by other purposes (as guest, education, visiting cultural and sport events etc.) - 27.5% and with holiday and recreation - 22.9%.

 

Sofia Airport with EUR 16.5 million in CCB

Sofia Airport was the only state-owned company under the jurisdiction of the Transport Ministry to provide a detailed answer to an inquiry of the 24 Chasa daily on the funds it kept at commercial banks. According to the data provided by the Sofia Airport EUR 16.5 million was deposited at Corporate Commercial Bank (CCB), EUR 13 million at Central Cooperative Bank, BGN 1.4 million at United Bulgarian Bank (UBB) and BGN 452,252 at UniCredit Bulbank. The Sofia Airport has opened accounts in 10 banks where it keeps a total of BGN 1.8 million, over EUR 66 million and USD 52.69, but information was not provided on the particular amounts kept at each bank. CCB is one of the banks where the Sofia Airport maintains an account. The Deputy Transport Minister Kamen Kichev has ordered state-owned companies to provide full access to the information required.

 

2012 Energy Sector Priorities: Building Gas Interconnectors, Extending Kozloduy Units 5, 6 Service Life, Energy Efficiency

Building gas interconnectors with the transmission systems of the neighbouring countries, extending the service life of Units 5 and 6 of the Kozloduy Nuclear Power Plant and energy efficiency will be the key priorities in the energy sector next year, Bulgarian Economy, Energy and Tourism Minister Traicho Traikov said in a BTA interview. The interconnector with Romania is to go under construction in a matter of weeks, and the interconnector with Greece will start to be built in the third quarter of 2012. The number one project in Bulgaria's electric power industry is extending the service life of the two operational generating units of the Kozloduy N-Plant, Traikov said. Work is also under way on increasing the power output of the two reactors by another 100 MW, which will be achieved until the end of 2013, he added. The Government will take a political decision on whether the Belene N-Plant construction project will be implemented after the HSBC consultant bank completes its work, Traikov said. The deadline for this completion by contract is March 31, 2012. The Government's decision may also be influenced by the results of the stress tests at the European nuclear power plants, which will be presented by the European Commission in mid-2012, the Minister said. Bulgaria's energy strategy for the period ending in 2020 envisages retention of the share of nuclear power through maximum extension of the service life of Units 5 and 6 of the Kozloduy N-Plant, as well as an increase of this share through construction of up to 2,000 MW new nuclear capacities. Bulgaria will seek a derogation regarding the purchase of carbon dioxide emissions and will thus achieve a smoother increase of electricity producer prices: the price will rise by 11 per cent in 2013, and in the following years its growth will be lower than with a full-scale purchase of the emissions, Traikov also said.

 

 

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea