불가리아 주요 경제뉴스 (4 - 11 May 2012)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (4 - 11 May 2012)

 

Sections/headline briefs:

 

MACROECONOMY:

       EC slashes Bulgaria's GDP growth forecast to 0.5% in 2012

       Bulgaria's average wage up 8.9% y/y in Q1

       Bulgarian official inflation holds at 1.7% in April

       March 2012 Industrial Production Down by 1.1% in Bulgaria, 0.4% in EU

       Bulgaria's Economy Expands by 0.5% in Q1 2012 Y/Y

 

INVESTMENTS:

       Renewable Energy Prices in Bulgaria to Drop from July   

       Bulgaria's FDI Starts Crawling Up in Q1 2012

       BGN 50 mln invested in brewing sector in Bulgaria in 2011

       Bulgarias Atlas Copco Lifton Wraps 3.8 Mln Euro Capacity Upgrade

 

COMPANIES AND INDUSTRIES:

       Lead & Zinc Complex (OCK) in Kurdjali in Danger of Bankruptcy

       Bulgarian Holding Starts Regional Expansion with Solar Park in Macedonia

       Electronics retail chain Technopolis opens 28th store in Bulgaria

       Bulgarian steel output contracted in Q1

       EVN unfreezes project for 80MW wind-power park in Bulgaria

       Bulgarias Solar Power Capacity Jumps to 132.7 MWp in 2011 EurObserv'ER

       China Sunergy Delivers 5.0 MW in Solar Modules in Bulgaria

 

 

 

 

Articles:

 

MACROECONOMY:

EC slashes Bulgaria's GDP growth forecast to 0.5% in 2012

The EC revised Bulgaria’s real GDP growth forecast downwards to 0.5% this year from 2.3% in the autumn report due to deteriorated EU economic prospects and the spill-over effects to the Bulgarian economy. Economic growth will accelerate to 1.9% in 2013, down by 1.8pps compared to the previous forecast. Weak labour market, deleveraging of the corporate sector and downsizing in the construction sector will delay recovery. Growth will be additionally constrained by low capital inflows and FDI. The EC assesses positively the financial sector that has remained stable, as well as public finances, which do not face major adjustment needs in the medium term. Given low economic growth, the EC expects moderate inflation, slowing to 2.6% on average in 2012 and stabilising in 2013. On the fiscal side, the Commission sees consolidation continuing in 2012 and 2013. In the absence of major tax changes, the EC expects improvement in the budget balance on back of restrictive fiscal stance in 2012. Pension reform and restructuring of loss making state-owned companies should help contain expenditures. The general government gap is projected to narrow to 1.9% of GDP in 2012 (from 2.1% in 2011) and to 1.7% of GDP in 2013. General government gross debt will increase moderately from 16.3% of GDP in 2011 to 18.5% in 2013, excluding the planned by the government debt issue in 2012 to pre-fund the repayment of euro denominated bonds in January 2013. Exports are expected to cool down in line with sluggish external demand. They are seen growing by 3.3% y/y this year, compared to 12.8% annual growth in 2011. Imports will rise at a slower rate than exports (by 2.7% y/y in 2012, down from 8.5% y/y in 2011). This will keep CA balance on surplus of 0.6% of GDP this year. 

 

Forecast for Bulgaria
	2008	2009	2010	2011	2012f	2013f
GDP (%, y/y)	6.2	-5.5	0.4	1.7	0.5	1.9
HICP (year-average, %)	12	2.5	3	3.4	2.6	2.7
Unemployment (year-average, %)	5.6	6.8	10.2	11.2	12	11.9
CA balance (% of GDP)	-23.2	-9	-0.4	0.8	0.6	-0.3
General budget balance (% of GDP)	1.7	-4.3	-3.1	-2.1	-1.9	-1.7
Public debt (% of GDP)	13.7	14.6	16.3	16.3	17.6	18.5
Source: European Commission

 

Bulgaria's average wage up 8.9% y/y in Q1

The average wage reached BGN 731 (EUR 373.8) in Q1, up by 8.9% y/y, statistical institute data showed. The annual growth accelerated marginally from 8.7% y/y in Q4 2011. Wages went up in all the 19 branches with most significant increases in Information and communication (up by 18.7% y/y), professional, scientific and technical activities (up by 18.3% y/y), wholesale and retail trade (up by 17.9% y/y) and mining and quarrying (up by 13.3% y/y). Public and private sector wages increased by 3.6% y/y and 11.1%, respectively, as compared to 4.2% annual expansion in the previous quarter. The gap between public and private sector wages narrowed from 16.5% in Q4 to just 4% in Q1. IntelliNews comment: The narrower gap between public and private sector wages may be a result of lay-offs of less-skilled and low-paid employees in the private sector, especially given the rising unemployment. Though the rate of decrease in employment decelerated from more than 20% y/y in 2008, the average wage continued growing in each year since the outbreak of the economic crisis. Still, wage growth fuelled mainly precautionary savings rather than consumption as the latter remained subdued despite the signs of recovery from end of 2010 and early 2011. In view of the current downturn in Europe and the first round negative effects on country’s exports, wages will most likely continue pushing up savings and domestic demand will remain weak in 2012 as well. 

 

Bulgarian official inflation holds at 1.7% in April

Bulgarian inflation was steady at 1.7 percent in April on a 12-month basis, the national statistical institute said on Monday. on a monthly basis, Bulgaria's consumer price index (CPI) edged up by 0.2 percent in April, following a 0.3-percent increase in March, the institute said in a statement. Using the European Union's harmonised index of consumer prices (HICP), the European Central Bank's inflation yardstick, 12-month inflation was 2.0 percent in April, up from 1.7 percent in March.

 

March 2012 Industrial Production Down by 1.1% in Bulgaria, 0.4% in EU

In March 2012 compared with February 2012, seasonally adjusted industrial production in Bulgaria fell by 1.1 per cent, compared with 0.4 per cent in the entire EU and 0.3 per cent in the euro area, the Statistical Office of the EU (Eurostat) reported. The figures stand in contrast with German data showing output in the euro area's largest economy up 1.3 percent for the month. The Reuters news agency commented that strong production in Germany could not make up for a slump across the rest of the euro area in March with output at factories falling and signalling an oncoming recession may not be as mild as policymakers hope. Industrial production in Spain decreased by 1.8 per cent, and in France, the second-largest economy after Germany, by 0.9 per cent. The largest falls were recorded in the Netherlands, by 9.0 per cent, Estonia, 3.4 per cent, Denmark, 2.8 per cent, and Ireland, 2.7 per cent. In March 2012 compared with March 2011, industrial production dropped by 1.9 per cent in the EU and 2.2 per cent in the euro area. The decrease in Bulgaria was 3.3 per cent.

 

Bulgaria's Economy Expands by 0.5% in Q1 2012 Y/Y

The Gross Domestic Product, GDP, in Bulgaria in the first quarter of 2011 increased by 0.5%, compared with the same quarter of the previous year. GDP remains at the same level compared to the fourth quarter of 2011. These flash estimates were released Tuesday by the Bulgarian National Statistics Institute, NSI. According to the flash GDP estimates for the first quarter of 2012, the GDP at current prices amounted to BGN 15 661 M. Bulgaria's Gross Value Added, GVA, at current prices amounted to BGN 13 358 M. The services sector have the largest share (63.7%) in the total value added, followed by industrial sector (32.3%). The agricultural sector constitutes 4% of the value added in the total economy. In the structure of GDP by the expenditure approach, final consumption (86.9%), which in nominal terms amounted to BGN 13 612 M, has largest share in GDP. In the first quarter of 2012 the Gross Fixed Capital Formation is BGN 3 346 M and has a share of 21.4% in GDP. The external balance (exports minus imports) was negative. According to the seasonally adjusted data, the GDP growth rate in the first quarter of 2012 remains at the same level compared with the previous quarter. According to the seasonally adjusted data, in the first quarter of 2012 the Gross Value Added of the total economy decreased by 0.4%, compared to fourth quarter of the previous year. The GDP growth rate in the first quarter of 2012 remains at the same level compared with the previous quarter According to flash estimates of GDP by final expenditure, the Final Consumption Expenditure increased by 0.2% in the first quarter of 2012. For the same period, the Gross Fixed Capital Formation increased by 2.5%. In the first quarter of 2012, the exports of goods and services decreased by 4.6%. During the same period, imports of goods and services decreased by 2.4% over the previous quarter. During the first quarter of 2012, GDP increased by 0.5% compared to the same quarter of the previous year. Gross Value Added decreased by 0.3% compared to same quarter of previous year. The indicator's movement is determined mainly by the increase recorded in the agricultural sector (12.4%) and industry (2%). Services have a negative contribution to Value Added with a decline of 0.8% over the period. Regarding the expenditure component of GDP, a major contributor to registered positive economic growth of 2.2% is final consumption. Gross Fixed Capital Formation recorded a decrease of 3.4% compared to the same quarter of the previous year. Exports and imports of goods and services decreased respectively by 1.9% and 1.6% compared to the corresponding quarter of previous year. 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 first quarter of 2012 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 first quarter of 2012 on 6 June 2012.

 

INVESTMENTS:

Renewable Energy Prices in Bulgaria to Drop from July

The preferential prices for purchasing energy from renewable sources will be reduced from July 1, 2012, according to Angel Semerdzhiev, Chair of the State Commission for Energy and Eater Regulation (DKEVR). "Analysis is now underway, but energy prices will definitely drop, especially prices of energy generated by photovoltaic plants, because capital expenditures are also decreasing," the DKEVR Chair explained Tuesday, without citing concrete figures. He refused to comment on prices of natural gas in Q3, 2012, adding that the proposal of state-owned gas supplier Bulgargaz was yet to be received. Bulgargaz published Monday its Q3 2012 gas price forecast, noting that the US dollar exchange rate was supposed to be the only influence. Bulgargaz argued that the 11% discount negotiated with Russian Gazprom had already been calculated into the tariff which entered into force on April 1, stressing that the company's request for a gas price increase of 26% had been downsized to 13% at that point. The state-owned gas supplier is to submit its Q3 2012 gas price request with DKEVRin one month. Semerdzhiev further defined the appointment of DKEVR member Evgenia Haritonova as Deputy Energy Minister as a sign of recognition of the watchdog's expertise. He added that the energy watchdog was now looking to fill out its staff after Haritonova's departure.

 

Bulgaria's FDI Starts Crawling Up in Q1 2012

Source: BNB

Bulgaria has registered an increase in its foreign direct investment in January-March 2012 year-on-year, according to the latest data of the Bulgarian National Bankreleased Wednesday. According to preliminary data, the Foreign direct investment in Bulgaria for January - March 2012 amounted to EUR 236.8 M (0.6% of GDP), compared to a negativeFDI of EUR 42.2 M (0.1% of GDP) for January - March 2011. Bulgaria's attracted Equity Capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) for January - March 2012 amounted to EUR 180.3 M. It decreased by EUR 51.9 M compared to the equity capital attracted in the same period of 2011 (EUR 232.2 million). Bulgaria's receipts from real estate investments of non-residents amounted to EUR 44.9 M, up from EUR 37 M attracted in January - March 2011. The other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers' credits and debt securities) was positive, amounting to EUR 38.6 M in January - March 2011, compared to a negative other capital, net of EUR 299.3 M in January - March 2011. Based on preliminary data on profit/loss, Bulgaria's Reinvested Earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) in January - March 2012 were estimated at EUR 17.9 M, compared with EUR 24.8 M in the same period of 2011. By country, the largest direct investments in Bulgaria for the period January - March 2012 were those of the Netherlands (EUR 257.1 M) and Switzerland (EUR 98.4 M). Bulgaria's largest negative investment flows for the period were towards Germany (EUR -152.3 M), Greece (EUR -61.8 M) and UK (EUR -49.9 M) mainly due to net payments on intercompany credits in accordance with the loan repayment schedules of enterprises. By branch, Bulgaria's largest investments for January – March 2012 were in Electricity, gas and water supply (EUR 118.9 M). Bulgaria's largest net payments in the reporting period were in Real estate, renting and business activities (EUR -35.2 M). According to preliminary data in January - March 2012, Bulgaria's direct investment abroad increased by EUR 20.7 M, compared to EUR 44 million in January - March 2011.

BGN 50 mln invested in brewing sector in Bulgaria in 2011

In 2011 the beer consumption in the country amounts to around 5.08 million hectolitres, which is 2.6% more compared to 2010. "Despite the difficulties in general in the brewing sector in Bulgaria, the sector continues development and investments are made in new technologies and production. only in 2011 some BGN 50 million has been invested in the sector, while the investments made over the last five years run to BGN 392 million," said Ivana Radomirova, secretary general of the Union of Brewers in Bulgaria, speaking for Bulgaria on Air TV. In 2011 the beer consumption in the country amounts to around 5.08 million hectolitres, which is 2.6% more compared to 2010. In 2011 the state has collected revenues from excise on beer amounting to BGN 77 million, Radomirova added. There is an increase in the import of beer from European countries, as well as a stable export of beer from Bulgaria abroad.

 

Bulgarias Atlas Copco Lifton Wraps 3.8 Mln Euro Capacity Upgrade

Atlas Copco Lifton, the Bulgarian subsidiary of Swedish industrial tooling and equipment company Atlas Copco, said it formally wrapped up on Thursday the expansion of the production facilities it operates in the Danubian town of Ruse. The value of the project for the relocation of the production of light compaction equipment from Sweden to the site in Ruse, launched in September last year, is 3.8 million euro ($4.8 million), Atlas Copco Lifton said in a press release. As a result of the investment, the number of Atlas Copco Liftons employees rose to 113 from 84. Atlas Copco bought hydraulic handheld tools manufacturer Lifton Bulgaria in early 2005. Since then it has twice expanded the production capacity of the factory. The town of Ruse is located in northern Bulgaria.

 

 

 

COMPANIES AND INDUSTRIES:

Lead & Zinc Complex (OCK) in Kurdjali in Danger of Bankruptcy

The situation with the Lead & Zinc Complex (OCK) in Kurdjali, Southern Bulgaria, is very difficult, Economy, Energy and Tourism Minister Delyan Dobrev told reporters Monday. Dobrev said that OCK's creditors have opened a procedure to call in the loans, which places the plant in the danger of declaring bankruptcy. OCK workers are staging fresh protests over unpaid wages and the company's dire financial straits. The protest first started back in March. Dobrev said that work continues to help the OCK owner and the banks find a solution to the problem. He noted that the case is different from the GORUBSO Madan mines, where the state could intervene by withdrawing the concession to speed up solving the problem with unpaid wages and bad working conditions. The owner of OCK Kurdjali, Valentin Zahariev, used to own the GORUBSO Madan mines as well until the latter were sold to a new owner at the end of March, after miners staged protests in the course of several weeks. Dobrev said that the OCK case concerns commercial relations between a private entity and banks. An OCK employee, technologist Stefan Atanassov, went on hunger strike Monday, the Confederation of Independent Trade Unions said. Three more workers said they would join the hunger strike on Tuesday. More than 4,500 signatures had been collected as at the early afternoon on Monday in a sign-in campaign underway in a tent camp the protesting OCK workers built in front of the building of the Regional Administration in Kurdjali. Dobrev also commented on natural gas and shale gas issues. He said that the legal provisions blocking conventional extraction of natural gas must be revised while a debate is to be held with regard to shale gas prospecting and extraction. "This debate does not means that we should amend or lift the existing moratorium on shale gas. The moratorium should remain until people are convinced that prospecting for shale gas protects sufficiently well both people and the environment," Dobrev said. The Minister made the comments after the official ceremony of the merger of the Managing Authority and the Intermediate Body of Operational Programme Competitiveness, which formed a new structure - European Funds for Competitiveness Chief Directorate. The new entity will function directly under the Economy Minister.

 

Bulgarian Holding Starts Regional Expansion with Solar Park in Macedonia

Bulgarian company Solarpro Holding has signed its first contract for setting up aphotovoltaic park in Macedonia, the company announced. The 1 MW solar park will be built near the southern Macedonian city of Bitola.Solarpro's Macedonian branch will be in charge of the complete EPC (Engineering, procurement and construction) servicing of the project. "The signing of this contract sets the start of the regional expansion of SolarproHolding. The company's strategy is, after assuming a leadership position in Bulgaria'ssolar power sector, to taget the regional markets, with neighboring countries being the utmost priority," Solarpro said in a statement. Solapro Holding notes that it has become the largest system integrator ofphotovoltaic parks in Bulgaria with a total of 32 solar power facilities at different stages of competition, and a total capacity of almost 100 MWp.

Electronics retail chain Technopolis opens 28th store in Bulgaria

The retail chain for electronics and electrical appliances Technopolis opened its first store in the town of Haskovo, in the southern part of Bulgaria, the company announced. This is the 28th store of the chain in Bulgaria. It is with trade area of 2,200 square metres. The project cost EUR 4mn (EUR 2.05mn) and will open 60 new jobs in the town. Ever since entering the market in 2011, retailer has invested of over BGN 168mn in the country and over 1,900 employees. 

 

Bulgarian steel output contracted in Q1

After a significant recovery in Bulgarian steel output in 2011, the first quarter of 2012 saw 8.7% year-on-year contraction, Platts Steel Business Briefing learnt from the Bulgarian Association of the Metallurgical Industry (BAMI).
The country’s crude steel production equalled 189,100 tonnes in Q1; all produced by EAFs, BAMI said. A steep 28% fall was experienced for long products output, which settled at 118,300t. The production is not likely to show significant recovery in the current quarter. A local longs producer and cut & bend prefabricating company said it is “not planning any capacity increase due to market conditions”, Platts SBB heard.  A dip in quarterly output of longs was reflected in lower sales, BAMI informed. The exported volumes fell 12% y-o-y, to 91,400t, while domestic deliveries dwindled 30% to settle at 31,200t. At the same time, the production of flat products increased by 14%, to 90,000t, which was not however reflected in larger sales volumes. The overall export of steel production from Bulgaria totalled 181,700t, of which the EU countries account for 80%, according to BAMI.

 

EVN unfreezes project for 80MW wind-power park in Bulgaria

EVN Bulgaria, part of Austria's energy company EVN AG, has applied for a licence to produce energy at the project for wind power park near the northern Black Sea town of Kavarna, Capital Daily informs. At the end of 2008, EVN and the German energy company Enertrag jointly started the construction of a EUR 95mn wind-power park comprising 25 generators. The project, which planned the installation of 50MW capacity and additional 30MW, was later on frozen. The current intentions of EVN envisage completing the construction of the power park in three stages by 2015. 

 

Bulgarias Solar Power Capacity Jumps to 132.7 MWp in 2011 EurObserv'ER

The combined installed capacity of photovoltaic power plants in Bulgaria rose to 132.7 megawatts-peak (MWp) in 2011 from 32.3 MWp a year earlier, a study carried out by EurObserv'ER showed. EurObserv'ER is the European Commission's renewable energy observatory. Photovoltaic power per inhabitant in Bulgaria stood at 17.7 Wp per capita in 2011, compared to an EU average of 102.2 Wp per capita, the Photovoltaic Barometer study indicated. Since 1998, The EurObserv'ER barometer measures the progress made by renewable energies in each sector and in each member State of the European Union. EurObserv'ER produces a series of figure-backed indicators covering energetic, technological and economic dimensions. Bulgaria must cover 16% its gross domestic energy consumption with electricity generated from renewable energy sources by 2020 to meet goals set by the 27-nation bloc.

 

China Sunergy Delivers 5.0 MW in Solar Modules in Bulgaria

China Sunergy Co., a specialized solar cell and module manufacturer, said on Thursday it has completed the delivery of 5.0 megawatts (MW) in solar modules for the Yerussalimovo Solar Park in Bulgaria. The modules were sold to Mitsubishi International GmbH and are being installed and managed by Helios Power, China Sunergy Co. said in a press release. Helios Power has been a strategic partner for China Sunergy in Bulgaria starting from 2010. Since the beginning of 2012, the Chinese company has shipped a total of 22.32 MW to Bulgaria, on top of 18 MW sold last year, which accounted for nearly 32% of the Bulgarian market in 2011, the statement said. The Yerussalimovo Solar Plant is located near the village of Yerussalimovo, in southern Bulgaria. "This solar plant is the seventh of a series of PV projects that we plan to develop in the next couple of years. We rely on China Sunergy's efficient products and services to achieve high project performance, and ultimately to guarantee the outcome of investments," Ivo Georgiev, managing director of Solaren Park Bulgaria EAD, a Helios Power subsidiary, said in the same statement. According to the latest Solarbuzz report the Bulgarian solar modules market totalled about 57 MW in 2011 and is projected to increase to 152 MW in 2012, China Sunergy CEO Stephen Cai said. "We hope to continue to maintain 30% market share this year, even considering the tripled market size," he added.

 

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea