불가리아 주요 경제뉴스 (1 - 8 June 2012)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (1 - 8 June 2012)

 

Sections/headline briefs:

 

MACROECONOMY:

       Bulgaria's unemployment rate at 12.6% in April, above EU level

       Bulgaria Expects Wheat Harvest of 3.8 M Tons in 2012

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

       Average Annual Wage in Bulgaria Stands at 4,395 Euros, in Denmark - 58,640

       Bulgaria's Industrial Production on the Rise in April

       Bulgaria’s construction output further rises in April 2012

INVESTMENTS:

       Greeks Invest 3 Billion Euro in Petrich

       Green energy raises the price of electricity

       Swiss Co Reichle & De Massari To Invest 4.96 Mln Euro in Fiber Optic Production Unit in Sofia

       Eko Bulgaria to invest EUR 10mn in new oil depot near Sofia

       EU Funds Management Minister Donchev on Water Sector Investments, Tourism

 

COMPANIES AND INDUSTRIES:

       Wholesale prices of mobile services in Bulgaria to fall by 50% as of Jul 1

       Bulgaria Will Build A Gas Power Plant on The Former Belene Npp Site

       Organic Production in Bulgaria Up by 30% in 2011

       Bulgaria invites Rosatom to participate in Kozloduy’s 7th nuclear reactor

       EVN Mulls Relaunching Construction of 80 MW Wind Farm in Bulgaria's Northeast

       Bulgaria to Export Cosmetics for the Middle East

       Bulgarias Megaport To Launch 3.1 Mln Euro Recycle Plant

       EBRD considers EUR 24.5mn loan for 40MW wind project in Bulgaria

 

 

Articles:

 

MACROECONOMY

Bulgaria's unemployment rate at 12.6% in April, above EU level

Bulgaria's unemployment rate was 12.6% in April 2012, unchanged from the previous month, Eurostat data showed. This is considerably above the unemployment rate in the EU27 - 10.3%. The unemployment rate followed a stable upward trend in H2 2011 and is above the rate, measured in terms of registrations with the Bulgaria's labour agency. The latter was 11.4% at the end of April, down 0,1pps compared to March. In April, the number of the unemployed in the state labour agency registered the first monthly drop since Sep 2011 and fell by 0.8% m/m to 373,524. In annual terms the number, however, continued to increase - by 8.6% y/y, up from 6.8% y/y in March. 

 

Bulgaria Expects Wheat Harvest of 3.8 M Tons in 2012

Bulgarian Agriculture Minister Miroslav Naydenov has said that he expects awheat harvest of around 3.8-3.9 million tons. Speaking Tuesday in the southern town of Sadovo, he assured that the Bulgarian market would not experience difficulties because a total of 1.5 million tons of wheatwould suffice to cover domestic needs. Naydenov informed that there would remain available export volumes. Bulgaria's Agriculture Minister suggested that wheat and bread prices were not expected to increase. Naydenov announced that fruit and vegetable growers would receive BGN 3 M in additional subsidies. He said that the scheme constituted state aid to compensate farmers for the high fuel prices. The Agriculture Minister noted that the agricultural workers would soon be able to start filing applications. He added that sheep breeders would also be able to apply for financial assistance to compensate them for the high fuel prices from June 18 on. Naydenov made clear that the sum allocated to sheep breeders was BGN 5 M.

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

Bulgaria's Gross Domestic Product, GDP, was BGN 15.7 M or EUR 8.8 M in the first quarter of 2012 at current prices. The GDP growth rate in the first quarter of 2012 was 0.5% compared with the same quarter of the previous year and remains at the same level compared with the fourth quarter of 2011. The official quarterly estimates of GDP for the first quarter of 2012 were released Tuesday by the Bulgarian National Statistics Institute, NSI. According to the preliminary data, the GDP at current prices in the first quarter of 2012 amounted to BGN 2 146 or EUR 1 097 per person. In USD terms at average quarterly exchange rate of BGN 1.4924 levs per USD, the GDP amounted to USD 10 523 M or USD 1 438 dollars per person. Gross value added, GVA, at current prices in the first quarter of 2012 amounted to BGN 13 374 M. Compared with the first quarter of 2011, the agricultural sector increased its share in CVA in the economy by 0.8 percentage points to 3.7% in the first quarter of 2012. The share of industrial sector reached 31.9 % - down by 1.3 percentage points. The share of services reached 64.4% which is an increase of 0.5 percentage points compared to the same period of the previous year. In the first quarter of 2012 the final consumption expenditure constituted 85.6% ofGDP in the economy. Investments (gross fixed capital formation) accounted for 19.7% of GDP. The external balance (exports-imports) was negative amounting to BGN 1 490 M. According to the seasonally adjusted data, the GDP growth rate in the first quarter of 2012 remained at the same level compared with the previous quarter. In the first quarter of 2012, the GVA of the total economy decreased by 0.3%, compared to fourth quarter of the previous year. According to the preliminary estimates of GDP by final expenditure, in the first quarter of 2012 the final consumption expenditure decreased by 0.5%. For the same period, gross fixed capital formation increased by 0.4%. In the first quarter of 2012, the exports of goods and services decreased by 2.9%. During the same period, imports of goods and services decreased by 0.8% over the previous quarter. During the first quarter of 2012, GDP increased by 0.5% compared to the same quarter of the previous year. GVA decreased by 0.2% compared to same quarter of previous year. The indicator's movement is determined mainly by the increase recorded in the agricultural sector 12.7%, industry 1.8%, trade, transport, hotels and restaurants 2.6%, financial sector 0.9% and real estate activities 2.8%. Construction, general government, education, human health care and other services had a negative contribution to the value added with a decline over the given period. Regarding the expenditure component of GDP, individual consumption was a major contributor to registered positive economic growth. The collective final consumption had a decline of 2.1% compared with the same quarter of previous year. Imports of goods and services keep the level of the corresponding quarter of the previous year and the exports of goods and services decreased by 0.1%.

 

Average Annual Wage in Bulgaria Stands at 4,395 Euros, in Denmark - 58,640

The average gross annual wage of full time employees in 2010 was lowest in Bulgaria out of all 27 EU member states, Eurostat data shows. Bulgarians are at the bottom of the chart when it comes to annual earnings, with 4,395 euros, while in Denmark this figure stands at 58,640 euros. Among the best paid Europeans are those from Germany - average annual gross income of 42,500 euros, Belgium - 43,500 euros, Luxembourg - 49,316, the Netherlands - 45,215 and Finland and Sweden - 40,000 euro each. Romanian, Lithuanian, Latvian and Estonian empoyees were also better paid than Bulgarians. Bulgaria is also at the bottom when it comes to minimum wage, at 138 euros per month, while in Romania this figure is 162 euros. In comparison, the minimum wage in Luxembourg is 1,800 euros per months, while in Denmark, the Netherlands, France and Belgium it varies aruond 1,500 euros. Bulgaria and Luxembourg are at the two opposite ends when it comes tot purchasing power of Europeans - 272 euro in Bulgaria and 1,495 euro in Luxembourg. 

 

Bulgaria's Industrial Production on the Rise in April

Bulgaria's seasonally adjusted industrial production index increased by 1.5% in April 2012 as compared to the previous month, according to the country's National Statistical Institute. On a yearly basis, April's working day-adjusted industrial production index increased by just 0.3%, according to the institute's data. The most significant monthly increases were seen in the production of basic metals (by 56.0%) and electrical equipment (by 9.2%). The most significant monthly decrease was observed in the production of chemicals and chemical products (by 19.4%). Year on year increases were registered in the production of investment goods (by 10.2%) and intermediate goods by (4.3%), while a 10.1% decrease was observed in the production of energy.

 

Bulgaria’s construction output further rises in April 2012

Bulgaria’s construction output increased for the second straight month in April 2012 and at a much faster rate than in March thanks mainly to the civil engineering sector, data of the statistics office showed. Construction output rose by 4% y/y in April following a revised 2% y/y hike a month earlier. Civil engineering works rose by 9.2% y/y in April, faster than the 7.5% increase in March. The volume of buildings construction edged up by 0.1% y/y in April, following a 2% decline in the previous month. In seasonally adjusted terms, total construction output was 0.2% higher on the month in April. 

 

 

 

INVESTMENTS:

 

Greeks Invest 3 Billion Euro in Petrich

For the past three years, greek companies have invested three billion euro in the southwestern town of Petrich. The severe economic crisis in Greece has made many local businessmen move their business to neighboring Bulgaria, greekreporter.com said. Bulgaria appears attractive to Greek entrepreneurs for its low taxes, cheap workforce and financial stability. 

 

Green energy raises the price of electricity

6% of the green energy share in the planned 10% electricity price hike in Bulgaria as of 1 July 2012, State energy and water regulatory commissionchairman Angel Semerdzhiev told journalists, cited by FOCUS News Agency. The rest is mainly for the irretrievable expenses of Maritsa East 1 and cogenerations, he added. He said also that the burden of renewable energy in the electricity price would increase, because in the past two-three months 240 MW of solar parks had been set into operation at a price of BGN 485. In the past two-three months there has been a boom in the construction and launching of solar parks. The biggest essential drop, which we prepare, is for solar parks, where production costs for panels has plummeted and consequently the efficiency of the parks is very high, said the watchdog chief and added the Commission planned to reduce the price at which it buys solar energy by 35-40%.

 

Swiss Co Reichle & De Massari To Invest 4.96 Mln Euro in Fiber Optic Production Unit in Sofia

Swiss copper and fiber optic systems manufacturer Reichle & De Massari will invest a total of 9.7 million levs ($6.17 million/4.96 million euro) in the construction of a fiber optic assembly and manufacturing facility in Sofia, Bulgarian economy ministry said on Tuesday. The production facility is expected to be put into operation in October creating about 100 new job places, the ministry said in a statement. Zurich-based Reichle & Massari chose to reconstruct an office building covering a total of 9,376 square metres and located behind Sofia's Freight Station for relocating part of its fiber optic production to Bulgaria. The relocation comes as a reaction to the negative effect of the expensive Swiss franc and uncertain economic indicators, Reichle & Massari said in a press-release published on its website in March. The additional location will also allow the company to compete in this fiercely contested growth sector, it added. The company has been active on the Bulgarian market for more than 10 years. Its local unit, R&M Bulgaria, was established in 2007 and operates in the IT sector in Bulgaria, Macedonia, Greece, Turkey, Serbia and Cyprus.

 

Eko Bulgaria to invest EUR 10mn in new oil depot near Sofia

Fuel retailer Eko Bulgaria plans to invest BGN 20mn (EUR 10.2mn) in building an oil depot near the capital Sofia, BTA news agency reported citing company director Yannis Polykandriotis. Currently Eko has two LPG depots in the country. The new depot is to be completed in 2013. Additionally, the fuel retailer plans to increase the number of its fuel stations to 100 within five years from 81 at present. Polykandriotis said the company will use franchise partners for the network expansion. Eko is owned by Greece’s Hellenic Petroleum. The company has invested BGN 250mn in Bulgaria since it entered the local market in 2002. 

 

EU Funds Management Minister Donchev on Water Sector Investments, Tourism

Bulgarian EU Funds Management Minister Tomislav Donchev sees investments in the water sector as a "major challenge". "These are the most complicated investment projects in terms of scope for both central and local government," he explained. Donchev expects the water sector to top the investment agenda in the coming years. "The water and sewerage infrastructure is the most backward infrastructure in Bulgaria and has not attracted investment for 70 years," he pointed out. "With an average [water] loss of 60 per cent, this investment should be assigned top priority. These facilities are of strategic importance for human life and health," Donchev added. He said that the municipalities in Kyustendil Municipality have concluded 120 million leva's worth of contracts as beneficiaries of the EU Structural Funds, and 10 per cent of the money has already been disbursed. Donchev noted Bulgaria's significant potential in the sphere of cultural, eco- and sight-seeing tourism. "Resources amounting to 387 million leva are available in Operational Programme Regional Development, of which three-quarters have been contracted for projects," he said further on. The EU Funds Management Minister was in Kyustendil for a conference on a project entitled "Grow Mobile: Implementation of innovative mobile applications boosting the development of innovative services in the tourism sector." The project is intended to present and discuss key trends and specific actions in tourism promotion in Europe and Bulgaria and the importance of combining cultural and natural heritage, regional resources and new technology for economic development. Taking part in the conference are representatives of the European Commission, Deputy Economy, Energy and Tourism Minister Ivo Marinov, and partners from Germany, Croatia and Bulgaria.

 

 

COMPANIES AND INDUSTRIES:

Wholesale prices of mobile services in Bulgaria to fall by 50% as of Jul 1

Bulgaria’s communications regulator has received the European Commission's nod to cut the wholesale prices of mobile services by 50% as of Jul 1, BNT reported, citing the head of the regulator, Veselin Bozhkov. The price will drop to BGN 0.055 from BGN 0.13. This will result in an up to 40% drop in the retail price for mobile services. A further price decrease to BGN 0.046 is expected as of Jan 1, 2013. Bozhkov has previously noted that after the changes take place, the prices in the country will be lower compared to the average for Europe and comparable to the prices in the countries where cost-driven pricing is used. 

 

Bulgaria Will Build A Gas Power Plant on The Former Belene Npp Site

Bulgaria has rejected the Belene NPP project and intends to replace it with a gas power plant. Bulgaria will not build the Belene NPP near the Danubian city, but has agreed to pay for reactor contracted for it. The reactor will be installed in the Kozloduy NPP or sold. It is unclear who will build the gas power plant at the Belene site, but, according to unofficial information, it will be Gazprom and the project will be associated with the construction of the South Stream pipeline. Prime Minister Boyko Borisov did not say who will build the future gas power plant at Belene, but made it clear that the decision to abandon the nuclear project is subject to negotiations to reduce the price of Russian gas for Bulgaria and to the construction of the South Stream pipeline. Delian Dobrev refused to comment on whether Gazprom will build the plant on the Belene site. He only explained that the project will be entirely private and will seek to create a balance in the energy mix because of the many wind energy projects in north-eastern Bulgaria and the expectations for economic development of the population in the region. According to unofficial information, however, Vladimir Putin has promised not to file claims for the interrupted nuclear project if the gas power plant is built by Gazprom. According to Deputy Minister of Economy and Energy Valentin Nikolov, however, there is no current investor who has shown interest in a gas turbine power plant at Belene. "It is very good idea. Bulgaria needs a gas power plant, but the question will be to find an investor. We would welcome any investment. We do not have an investor that is interested. We welcome any idea that can be realised in the energy sector," Nikolov said. "The problem with gas power plants is that the price of electricity they produce is not competitive," the former energy minister Traycho Traykov explained. "At the current prices that the country buys natural gas from Gazprom, the price of electricity produced by the gas hub would be over 70 euro per megawatt hour. Therefore, all companies that have expressed interest in this project insist on long term contracts with the National Electrical Company, but the government did not allow such contracts," Traikov said. The new Economy Minister, Delian Dobrev, in turn, said that the state will have no involvement in the sale of the energy produced by this plant, and that the investor in the plant should seek ways to realise the electricity production on the free market. He declined to comment on whether the construction of the plant will be under public procurement procedures such as the laws on energy require. The Prime Minister, for his part, explained that the intention to build a natural gas plant will depend on the economic justification given by the British bank HSBC. The bank was hired by the Bulgarian government to analyse the Belene NPP project and it is unclear what the consultant's conclusions from the analysis the gas project will be. "Now it is clear that the decision to stop the Belene NPP and build a gas plant is subject to negotiations regarding South Stream's natural gas prices," Borisov said.

 

Organic Production in Bulgaria Up by 30% in 2011

The share of organic vs conventional production in Bulgaria registered a 30% annual increase in 2011, according to Tsvetan Dimitrov, Deputy Minister of Agriculture and Food. Speaking Tuesday at the opening of a seminar on the benefits of organic products, he said that the control system indicated a total area of 26 622 hectares used fororganic farming in 2011 due to the increased demand for such products on the European and global markets. Tuesday's seminar took place within a forum held in Grand Hotel Sofia to present information about the benefits of organic food products and their quality, as well as price trends in the sector. Bulgaria's Deputy Agriculture Minister explained that cereals were most popular among organic producers, with a 20% annual increase in cereal areas in 2011. He noted that wheat, corn, barley and rye had occupied the largest organic areas in 2011. Dimitrov announced that the areas used for growing organic vegetables had increased by 60% to 670 hectares in 2011 from 2010. He said that the areas used for growing perennial crops like walnuts, hazelnuts, almonds and chestnuts (also very popular among organic farmers), had registered an annual increase of over 60%, followed by plum trees with 40% and apricot and apple trees, according to data from the control system. He informed that olive trees and other unusual plants for Bulgaria had been introduced in the system for the first time. Dimitrov drew attention to the fact that organic livestock breeding had also increased significantly in 2011, with a total of 10 000 sheep and goats, 58 000 bee families and the first registered organic bison farm with 200 animals.

Bulgaria invites Rosatom to participate in Kozloduy’s 7th nuclear reactor

Kiril Komarov, the deputy CEO of Rosatom, said Bulgaria has invited the Russian state-owned nuclear company to participate in a project for building the seventh block at Bulgaria’s nuclear power plant Kozloduy, news.bg reported citing Russian RIA-Novosti. The Bulgarian government decided in March 2011 to abandon a plan to set up a second nuclear power plant in Belene and decided instead to build a 1,000 MW reactor at the existing Kozloduy plant. Rosatom is owner of Atomstoyexport, which was to build the Belene nuke plant. 

 

EVN Mulls Relaunching Construction of 80 MW Wind Farm in Bulgaria's Northeast

Bulgaria's energy regulator said that EVN Kavarna, fully owned by EVN Naturkraft Erzeugungs Gesellschaft, has applied for a 35-year license for electricity generation. The license is planned to be used for the construction of a 80 megawatt (MW) wind farm in Kavarna, in northeast Bulgaria, a report published on the website of the State Energy and Water Regulatory Commission (SEWRC) indicated. The project was launched in 2008 and was planned to be completed in September 2010 but was eventually frozen. The value of the project was back then estimated at 95 million euro ($118 million). The wind farm is planned to be completed in three stages by the end of 2015. SEWRC formally reviewed the application on May 15 but hasnt yet announced its decision.

 

Bulgaria to Export Cosmetics for the Middle East

Bulgarian cosmetics has turned into a hit in the Middle East countries. Bulgarian cosmetics industry expects a growth of sales due to the excellent quality and low prices of Bulgarian cosmetic products. At the same time the demand for Bulgarian made cosmetics in Bulgaria decreases. The Bulgarian cosmetic brands hold 15% from the cosmetic market in Bulgaria.

 

Bulgarias Megaport To Launch 3.1 Mln Euro Recycle Plant

Bulgarian polymer packages producer Megaport will open a 6.0 million levs ($3.8 million/3.1 million euro) plant for recycling polyethylene and polypropylene folios, the countrys economy ministry said on Wednesday. The new plant will be launched in the city of Veliko Tarnovo, in north central Bulgaria, on Thursday at an official inauguration ceremony attended by economy minister Delyan Dobrev, the ministry said in a statement. The new factory will increase Megaports production capacity for waste folios from 300 to 800 tonnes per month, the statement added. Some of the equipment was purchased with financing granted under the EU-funded operational programme Competitiveness.

 

EBRD considers EUR 24.5mn loan for 40MW wind project in Bulgaria

The European Bank for Reconstruction and Development (EBRD) considers extending a EUR 24.5mn loan to finance the construction of three wind farms with a total installed capacity of 40MW in Bulgaria, the bank said on its website. The value of the project is EUR 67mn and it is expected to be financed along with one commercial bank. The three wind farms are to be built near Kaliakra and Varna, on the Black Sea coast. The project companies are registered in Bulgaria and are fully-owned by the sponsor, Terna Energy SA (Terna Energy), a subsidiary of GEK Terna Group engaged in developing renewable energy projects. The project will contribute to the expansion of the renewable energy market in Bulgaria that seeks to boost the share of electricity produced by renewable sources to 16% by 2020.

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea