불가리아 주요 경제뉴스 (10 - 17 February 2012)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (10 - 17 February 2012)

 

Sections/headline briefs:

 

MACROECONOMY:

v  Raiffeisen: Economy ends 2011 in slow motion

v  Bulgaria's Economy Expands by 1.5% % in Q3 Y/Y

v  Bulgaria's GDP up 1.5% y/y in Q4 2011, 1.6% in 2011 – flash estimate

 

INVESTMENTS:

v  Net FDI inflows in Bulgaria decline 40.7% to EUR 940mn in 2011

v  Bulgaria's unit of CEZ to invest over EUR 51mn in thermal power plant in Varna

 

COMPANIES AND INDUSTRIES:

v  Bulgaria's 2011 Wine Output Rises to 108 Mln Litres, Exports Edge Up  

v  China Ming Yang Group to Supply Turbines for Bulgarian Wind Parks   

v  Bulgarian Winter Resorts Jan Revenues Down 15% Y/Y

v  Coca-Cola HBC Sales Volume in Bulgaria Falls 4% in 2011

v  Computer sales in Bulgaria fall 16.6% in 2011

v  Bulgaria has resources to fuel some 500 MW of biomass power plants - BEF

v  Chinese Great Wall to start car production in Bulgaria on February 21, 2012

 

 

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Raiffeisen: Economy ends 2011 in slow motion

Bulgarian economy has slowed down its growth in the end of 2011, Raiffeisen experts said. Industry growth slowed down from 3.3% in Q3 2011 to 1.6% in Q4 2011. Worst performance was market in the processing industry. In three months the sector's growth rate dropped from 3.4% to 0.6%. 2011 average annual inflation rate was 4.2%. Crediting continued to shrink in December. Household crediting marked 0.4% annual downturn. As compared to November, consumer loans have dropped by BGN 67.9 million. Housing loans registered modest uptake of BGN 7.4 million. At the same time savings continue to grow. In only one month households managed to save additional BGN 898.2 million (3.1%). The annual uptake is 13% (BGN 3.5 billion). "Income and Employment insecurity and fears of a second recession are the main factors for households and companies to choose saving to spending", said Raiffeisenbank Chief Economist Kaloyan Ganev. In his words, delaying the solution of the debt crisis in Europe will have negative influence on Bulgarian economy in the months to come. Sega daily informed.

 

Bulgaria's Economy Expands by 1.5% % in Q3 Y/Y

The Gross Domestic Product, GDP, in Bulgaria in the fourth quarter of 2011 increased by 1.5%, compared with the same quarter of the previous year. The increase is 0.4% compared with the third quarter of 2011. These flash estimates were released Wednesday by the Bulgarian National Statistics Institute, NSI. According to the flash GDP estimates for the fourth quarter of 2011, the GDP at current prices amounted to BGN 20 447 M. Bulgaria's gross value added, GVA, at current prices amounted to BGN 17 579 M. The services sector have the largest share (63.3%) in total value added, followed by industrial sector (33%). The agricultural sector constitutes 3.7% of value added in the total economy. In the structure of GDP by the expenditure approach, the largest share in GDP has the final consumption (77.7%), which in nominal terms amounted to BGN 15 890 M. In the fourth quarter of 2011, the gross fixed capital formation is BGN 5 892 M and has a share of 28.8% in GDP. The external balance (exports minus imports) was negative. The GDP increase is 0.4%, compared with the third quarter of 2011. In the fourth quarter of 2011 gross value added of the total economy increased by 0.1%, compared to third quarter of 2011. According to flash estimates of GDP by final expenditure, in the fourth quarter of 2011, final consumption expenditure recorded increase by 0.4%. Gross fixed capital formation increased by 4.0%. Exports of goods and services in the fourth quarter increased by 3.8% compared to the previous one. During the same period, imports of goods and services increased by 1.3%. During the fourth quarter of 2011 gross value added increased by 1.6% compared to the same quarter of the previous year. The indicator's increase is determined mainly by the increase recorded in the agriculture (5.0%) and industry sector (0.4%). The services sector has a negative contribution to value added with a decline of 6.1% over the period. As regards the expenditure component of GDP, the main contributor to registered positive economic growth is the export of goods and services which increased by 10%. Final consumption recorded increase by 1.4% and gross fixed capital formation recorded decrease by 6.5% to the corresponding quarter of previous year. The import of goods and services registered increase by 3.4%. According to the 2011 flash estimates the level of nominal GDP amounted to BGN 76 170 M. GDP at 2005 constant prices increased by 1.6% compared with the previous year. The GVA generated by the national economy reached BGN 65 711 M at current prices. Compared to 2010 the gross value added increased by 1.7%. The growth rate is calculated by using chain-linked estimates of the GDPcomponents based on average 2005 prices. The Eurostat (the statistical office of the EU) defines a flash estimates as: „...the earliest picture of the economy according to national accounts concepts, which is produced and published as soon as possible after the end of the quarter, using a more incomplete set of information than that used for traditional quarterly accounts..." Flash estimates for GDP are based on the preliminary available monthly and quarterly indicators for the components of GDP structure (subject to subsequent update and revisions). Flash estimates of GDP for the fourth quarter of 2011 were prepared within 45 days after the reference period. They are presented in a standard format for publication of quarterly national accounts data - current prices, relative shares of the components in the GDP structure and growth rates as compared with the previous quarter and compared with the same period of the previous year. According to the Calendar of statistical surveys, NSI will prepare and publish official quarterly estimates of GDP for the fourth quarter of 2011 on 6 March 2012.

 

Bulgaria's GDP up 1.5% y/y in Q4 2011, 1.6% in 2011 – flash estimate

Bulgaria’s GDP (in seasonally and working-day adjusted terms) expanded by 1.5% y/y in Q4, decelerating marginally from revised 1.6% y/y in Q3, 2% y/y in Q2 and 3.3% y/y in Q1, according to the flash estimate of the national statistical institute. In quarterly terms, the indicator increased by 0.4% in Q4, speeding from 0.3% q/q, both in Q3 and Q2. On the supply side, the agriculture turned to real 5% growth in Q4 after declining in the previous three quarters. The services value added declined by real 6.1% y/y in Q4 after the one-off increase of 3.2% y/y in Q3. The industry value added growth decelerated further to 0.4% y/y from revised 2.2% y/y in Q3, in line with deteriorating performance of the earlier released data on industrial production and sales. The adjustments also fell in Q4 (down by 0.8% y/y) as compared to positive impact on the GDP increase in Jan-Sep. On the demand side, exports growth accelerated to 10% y/y in Q4 from revised 2% y/y in Q3 but still below 12.2% y/y in Q2 and 21.6% y/y in Q1. IntelliNews comment: The improvement shows that price developments had positive effects on local sales abroad and have offset the negative impacts stemming from the world economic slowdown. We remind that earlier released nominal figures showed exports growth deceleration in each quarter since the beginning of the year. Imports growth slowed to 3.4% y/y from revised 8.1% y/y a quarter earlier. Final consumption increased by 1.4% y/y in Q4, slowing from 1.6% y/y in Q3. Investment in fixed capital declined by 6.5% y/y in Q4 and the contraction sped from 2.8% y/y in Q3. They marked an increase in H1. In 2011, GDP rose by 1.6%, below the government forecast of 2.8% and the forecasts of most of the international institutions, but up from 0.2% in 2010. The statistical office will publish regular GDP figures for Q4 and 2011 on March 6, 2012. 

 

 

INVESTMENTS:

 

Net FDI inflows in Bulgaria decline 40.7% to EUR 940mn in 2011

Net FDI flows were positive at EUR 940mn in 2011 and declined by 40.7% as compared to a year earlier, according to preliminary data of the central bank. In December alone, the balance on FDI was positive at EUR 280.9mn but fell by 16% y/y. Equity capital invested in the country’s banking sector by foreigners plunged by 67.3% y/y to EUR 37.8mn but investments in the non-banking sector rose by 53.6% y/y to EUR 183.5mn. In 2011, total equity capital was down by 32.1% relative to 2010. The capital in real estate properties rose by 5.1% y/y in December and by 9.3% last year, however, still much below the pre-crisis levels. Reinvested earnings fell both in December and in the full-year readings. The other capital account, which shows net change in intra-company loans, showed inflows of EUR 50.5mn in December, down by 51.6% y/y. Since the beginning of the year, however, companies have reduced their net liabilities to parent companies by EUR 109.9mn, compared to an increase of EUR 74.2mn a year earlier. 

 

Bulgaria's unit of CEZ to invest over EUR 51mn in thermal power plant in Varna

The local subsidiary of Czech major energy company CEZ plans to invest above BGN 100mn (EUR 51.1mn) in its coal-fired power plant in the northern Black Sea city of Varna, chairman of the management board Petr Dokladal said, quoted by state-run news agency BTA. The project aims to extend the plant’s exploitation by 2030 and will reduce the carbon dioxide emissions. Field works on the project are expected to start early next year and will continue by the end of 2015. CEO Kamen Boshnakov explained that the first stage of the project envisages construction of desulphurization installations. At a later stage, CEZ will install technologies for reducing the carbon dioxide emissions. Also, the fuel of the power producer will be renewed. Under that scheme, four of the six units of the power plant will be renovated. Power Plant Varna is the second-largest thermal power plant in Bulgaria and on the Balkan Peninsula, with a total installed power of 1,260 MW. It consists of six 210 MW units. The power plant provides 60% of the cold reserve of the country. 

 

 

COMPANIES AND INDUSTRIES:

 

Bulgaria's 2011 Wine Output Rises to 108 Mln Litres, Exports Edge Up  

Bulgaria produced 108 million litres of wine in 2011, up by 4.9%, the countrys agriculture ministry said on Tuesday. Wine exports rose by 1.9% to 58.5 million litres in 2011, the ministry said in a statement. Russia, Romania, Poland, and the U.K. were Bulgaria's main foreign markets for wine. Domestic wine sales totalled 93.2 million litres, 1.4% higher than a year earlier.

China Ming Yang Group to Supply Turbines for Bulgarian Wind Parks

China Ming Yang Wind Power Group Ltd., a Guangdong-based wind turbinemanufacturer, has agreed to supply machines on 125 MW of projects in Bulgaria. Ming Yang Wind Power (International) Co. Ltd., a unit of the company, signed contracts to provide turbines and build the two parks for W. Power Ltd., a Bulgarian wind energy developer, China Ming Yang said today in a statement. "This represents a significant milestone of Ming Yang's overseas market development, marking an important step in extending our footprint in mainstream European markets," Chief Executive Officer Zhang Chuanwei said in the statement, as cited by Bloomberg. Chinese companies including Xinjiang Goldwind Science Technology & Co., China's second-largest wind-turbine maker, are studying expansion abroad to overcome a slowing home market after a tighter government approval process for new projects intensified competition. New installed turbines in China about doubled each year from 2005 to 2010 when 18.9 GW of new machines were added. That pace stalled last year as China added 18 GW, according to the Global Wind Energy Council. China Ming Yang will also help finance the project, according to Jonathan Mann, chief executive officer of Sofia-based W. Power, which also is talking to local banks about loans. China Ming Yang Wind agreed the engineering, procurement and construction contracts with W. Power and another company called A1 Development in December, according to the statement. The first three turbines were shipped on Feb. 6 to the 4.5 MW pilot project in Somovit, which will be commissioned in July. The 120 MW Milkovitsa project in Pleven in the north of Bulgaria is planned to start later this year. The entire 125 MW project will use China Ming Yang Wind turbines, Mann said.

 

Bulgarian Winter Resorts Jan Revenues Down 15% Y/Y

Bulgaria's revenues from foreign visitors in winter resorts are down 15% compared to January 2011. The data was reported Monday by the Bulgarian business portal Investor.bg, citing representatives of the tourist sector. The trend from the last few years of having the most visitors coming from Russia and the UK continues to be observed, but arrivals from neighboring countries are down significantly. The reason for the decline in revenues is attributed not only to fewer tourists, but their decreased spending as well. Some hotel owners say that if good ski conditions persist until April, the lag inrevenues could be made up. Great hopes in attracting more wealthy holidaymakers are placed in the upcoming World Ski Cup competition in Bansko and the already opened European Ski Cup in Pamporovo. There had been plenty of snow in the last weeks, but the polar cold had chasedtourists away from the country's top winter resorts. The Bulgarian tourist business is attempting to attract more visitors by package vacations discounts – for example, there are currently 3-star hotels in Borovetsand Bansko offering all inclusive stay for BGN 18-22 per person per day, but some hotels continue to be overpriced which is hurting the sector.

 

Coca-Cola HBC Sales Volume in Bulgaria Falls 4% in 2011 

Greek-based Coca-Cola Hellenic Bottling Co (HBC) on Wednesday reported a 4.0% decrease of its sales volume in Bulgaria last year. Coca-Cola HBC sales in Bulgaria fell to 56.3 million unit cases in 2011 compared to 58.4 million a year earlier, the company said in its annual financial report. Coca-Cola HBC is the world's second largest bottler of Coca-Cola products. Its total sales volume last year amounted to 2.08 billion unit cases, down by 1% from 2010. Earnings before interest and tax (EBIT) decreased to 541 million euro ($712.4 million) in 2011 from 687 million euro in the previous year, while net sales revenue grew to 6.85 billion euro from 6.79 billion euro in 2010.

 

 

 

Computer sales in Bulgaria fall 16.6% in 2011

Computer sales in Bulgaria decreased by 13.5% y/y in Q4, according to information from research company IDC, investor.bg reported. The contraction narrowed from 15% y/y in Q3. Portable computers sales fell by 11.2% while the sold desktop computers were by 20% lower in annual comparison. In the full-year reading, computer sales declined by 16.6% relative to 2010 and the level was lower than in 2007. The sales of portable and desktop computers went down by 18.8% and 10.2% in 2011. At the same time, the computer market in CEE countries has increased by 7.3% in 2011. IDC says that the forecast for this year is rather pessimistic. 

 

Bulgaria has resources to fuel some 500 MW of biomass power plants – BEF

Bulgaria has inputs to fuel biomass power generators with total production capacity of some 500 MW, chairperson of the Bulgarian Energy Forum (BEF) Ivan Hinovski said in an interview for BTA. The country has the potential to process at least 8mn cubic metres of residual woods to produce electricity. Bulgarian Energy Forum explains the lack of investment in this sector with legislative drawbacks.

 

Chinese Great Wall to start car production in Bulgaria on February 21, 2012

Bulgarian company Litex Motors and Chinese car maker Great Wall will inaugurate cars production at the plant in the central Bulgarian city of Lovech on February 21, investor.bg reports. The project was launched in the fall of 2009 when the two companies signed a cooperation agreement. The first test car was produced in November 2011. The cars will be sold on the local and the European markets. At present, the number of the employed is more than 120 workers and may reach some 2,000 when the plant starts working at full production capacity of 50,000 cars per year. The investment in the car-assembling facility is to reach EUR 80mn. 

 

 

 

 

 

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea