불가리아 주요 경제뉴스 ( 5 –14 September 2012)

BULGARIAN ECONOMIC TOP NEWS DIGEST WEEKLY REPORT( 5 –14 September 2012)

 

Sections/headline briefs:

 

MACROECONOMY:

Ø  Bulgaria's unemployment rate drops to 10.7% in Aug 2012

Ø  Bulgaria’s foreign trade gap expands in Jan-Jul on high imports

Ø  Bulgaria’s industrial production falls by 0.4% y/y in July 2012

Ø  Bulgaria's 2012 January - July exports up 1.7%

Ø  Bulgaria's Inflation Rate Reaches 0.5% Aug 2012

Ø  Bulgaria risks losing EU regional development funds

 

INVESTMENTS:

Ø  Ingram Micro to launch business operations in Bulgaria - report

 

COMPANIES AND INDUSTRIES:

Ø  Cancelled Russian N-Plant Cost Bulgaria BGN 1.4 B So Far

Ø  Bulgaria cuts tariffs for new solar installations

Ø  Three groups vie to inform Bulgarians on switchover to digital TV

Ø  Bulgaria's Hotels Make BGN 190 M in July

Ø  Bulgaria's Largest Non-Ferrous Plant Sold in Minutes

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

MACROECONOMY

Bulgaria's unemployment rate drops to 10.7% in Aug 2012

The unemployment rate, measured in terms of registrations with the state labour agency, slipped 10 basis points m/m to 10.7% in August, the institution informs in a note on its website. When compared to the year-ago period, the rate has increased by 1.1pps. In September we should see another slight decrease in the unemployment rate and a gradual increase afterwards, in line with the seasonal pattern. The number of registered unemployed dropped by 1.4% compared to July. In annual terms the number however increased by 12% - a lower growth than 13% y/y in July. The manufacturing sector accounted for the largest share of newly-registered unemployed during the month, followed by trade and administration. 

 

Bulgaria’s foreign trade gap expands in Jan-Jul on high imports

The foreign trade deficit expanded to BGN 4,727mn (EUR 2,416mn) in the first seven months of the year, up from BGN 2,049mn a year earlier, preliminary data of the statistics office shows. Exports growth remained sluggish (1.7% y/y) and was driven by trade with non-EU states, which went up by 5.3% y/y in Jan-Jul, while exports to the EU inched down by 0.7%. Imports rose by 12.4% y/y in Jan-Jul. Trade balances with both EU and non-EU states remained negative. 
In July alone, the gap expanded by 62.7% on the year due to 5.1% increase in imports and only 0.8% y/y rise in exports.

 

Period	Exports	Imports	Trade balance	Exports y/y	Imports y/y	Trade balance y/y
	BGN mn	BGN mn	BGN mn
Q1 2012	9046.1	10883.4	-1837.3	177.8%	203.1%	449.1%
Q2 2012	10296.4	12739.4	-2443	6.3%	16.8%	100.5%
H1 2012	19342.5	23622.8	-4280.3	1.8%	13.7%	141.2%
Jul-12	3646	4093	-447	0.8%	5.1%	62.7%
Jan-Jul 2012	22988.5	27715.8	-4727.3	1.7%	12.4%	130.6%
Source: statistics office

 

Bulgaria’s industrial production falls by 0.4% y/y in July 2012

Bulgaria’s industrial production turned to decline in July after rising by revised 1.8% y/y in June, preliminary seasonally adjusted data of the statistics office shows. The output shrank by 0.4% y/y in real terms in July and by 3.2% y/y when compared to the previous month. The manufacturing sector dropped by 0.4% y/y due to lower production in the textiles, clothes, paper, chemical industry. The mining industry remained in positive territory (up by 0.95% y/y) due to the non-metals subs-sector, while coal and metal ore mining production shrank y/y in Jul. The utilities sector went up by 1.9% y/y. 

 

Bulgaria's 2012 January - July exports up 1.7%

In July 2012 the total exports added up to BGN 3.6 billion and grew by 0.8% compared to the corresponding month of the previous year. In the first seven months of 2012, the value of all exported goods from Bulgaria amounted to BGN 23.0 billion, which as increase of 1.7%, compared to the corresponding period of 2011. The data was released Monday by the National Statistics Institute, quoted by Sofia News Agency. The total value of all goods imported in the country in the period January - July 2012 amounted to BGN 29 billion (at CIF prices), or by 12.5% more than the corresponding period of the previous year. In July 2012, the total imports increased by 5.7% compared to July 2011 and added up to BGN 4.3 billion. In July 2012 the total exports added up to BGN 3.6 billion and grew by 0.8% compared to the corresponding month of the previous year. The total foreign trade balance (exports FOB - import CIF) was negative in the period January – July 2012 and amounted to BGN 5 962.9 million, which was BGN 2 832.3 million more than the balance in the first seven months of 2011. At FOB/FOB prices (after elimination of transport and insurance costs on imports) in the period January – July 2012, the total foreign trade balance was also negative and amounted to BGN 4 727.3 million. In July 2012, the total foreign trade balance (exports FOB - import CIF) was negative and added up to 651.8 M. The trade balance at FOB/FOB prices was also negative and amounted to 447.0 Million Levs. In the period January - June 2012, Bulgarian exports to the EU decreased by 0.8% compared to the corresponding period of the previous year and amounted to BGN 11.5 B. The main trade partners of Bulgaria were Germany, Italy, Romania, Greece, France and Belgium that formed 71.6% of the exports to the EU Member States. The most significant growths were observed in the exports to Portugal and Slovenia while the most notable falls were registered in the exports to Luxembourg and Malta. In June 2012, the exports to the EU decreased by 3.1% compared to the corresponding month of the previous year and amounted to BGN 2.0 B. Bulgarian imports from the EU in the period January - June 2012 increased by 14.2% compared to the corresponding period of the previous year and added up to 14.5 B at CIF prices. The most significant growths were reported on the imports from Cyprus and Portugal, while the largest decrease - in the imports from Malta. In June 2012, the Bulgarian imports from the EU Member States grew by 29.5% compared to the corresponding month of the previous year and added up to BGN 2.6 B at CIF prices. The foreign trade balance of Bulgaria (export FOB - import CIF) with EU in the period January – June 2012 was negative and added up to BGN 2 938.1 M. At FOB/FOB prices (after elimination of transport and insurance costs on imports) the trade balance was also negative and amounted to BGN 2 366.9 M. In the first six months of 2012, compared to the corresponding period of the previous year, the largest growth in the exports of Bulgaria to EU distributed according to the Standard International Trade Classification was recorded in the section "Animal and Vegetable Oils, Fats and Waxes" and the most notable fall - in section "Crude Materials, Inedible (except Fuels)". In imports from EU, the largest growth was reported in section "Mineral fuels, lubricants and related materials" while a fall was observed only in section "Animal and Vegetable Oils, Fats and Waxes". In the period January - July 2012, the Bulgarian exports to third countries increased by 5.3% compared to the corresponding period of the previous year and amounted to BGN 9.2 B. The main trade partners of Bulgaria were Turkey, China, Russia, Serbia and The FYR of Macedonia that formed 46.8% of the exports to non EU countries. The exports to United Arab Emirates, Israel, Syria, China and Canada increased significantly while the most significant falls were reported on the exports to Singapore, Iran, India and Croatia. In July 2012, the exports to third countries increased by 1.9% compared to the corresponding month of the previous year and amounted to BGN 1.4 B. Bulgarian imports from third countries in the first seven months of 2012 increased by 12.9% compared to the corresponding period of the previous year and added up to BGN 11.9 B (at CIF prices). The most significant growths were reported on the imports from Bosnia and Herzegovina, Peru and Brazil, while the largest decreases were observed in the imports from Israel and Kazakhstan. In July 2012 the Bulgarian imports from third countries grew by 11.4% compared to the corresponding month of the previous year and amounted to BGN 1.7 B. Bulgarian imports from third countries in the first seven months of 2012 increased by 12.9% compared to the corresponding period of the previous year and added up to BGN 11.9 B (at CIF prices). The most significant growths were reported on the imports from Bosnia and Herzegovina, Peru and Brazil, while the largest decreases were observed in the imports from Israel and Kazakhstan. In July 2012, the Bulgarian imports from third countries grew by 11.4% compared to the corresponding month of the previous year and amounted to BGN 1.7 B. The largest growth in imports from third countries was reported in section "Machinery and Transport Equipment," while the largest fall was observed in section "Food and Live Animals".

 

Bulgaria's Inflation Rate Reaches 0.5% Aug 2012

Bulgaria saw a monthly inflation of 0.5% in August, according to the country's National Statistical Institute. The inflation rate since the beginning of the year (August 2012 compared to December 2011) was 2.6% and the annual inflation in August 2012 compared to August 2011 was 3.9%. The annual average inflation, measured on the basis of the consumer price index over the last 12 months (September 2011 - August 2012) compared to the previous 12 months (September 2010 - August 2011), was 2.5%. The harmonized index of consumer prices in August 2012 compared to July 2012 was 100.6%, i.e. the monthly inflation was 0.6%. The inflation rate since the beginning of the year (August 2012 compared to December 2011) was 2.4% and the annual inflation in August 2012 compared to August 2011 was 3.1%. The annual average inflation, measured by HICP, in the last 12 months (September 2011 - August 2012) compared to the previous 12 months (September 2010 - August 2011) was 2.3%.

 

Bulgaria risks losing EU regional development funds

Bulgaria is falling behind on payments for projects part of the Operational Programme Regional Development (OPRD), Regional Development and Public Works Minister Liliyana Pavlova said during the annual conference tracking the progress of OPRD implementation in the country, as quoted by BTA news agency. Projects with approved financing have been delayed, making it impossible to disburse payment from the fund. According to Pavlova, the main causes for delay are disputes over tender offers from losing bidders. If not completed by the end of 2013, those projects will be cancelled and any payments already made will need to be repaid to the EU. Pavlova identified as most risky ventures in the public transportation, flood prevention and health system infrastructure sectors. According to her estimates the total value of endangered projects is up to BGN 1bn. So far, projects for 90% of the BGN 3.1bn OPRD funds available have been approved, however only 28% have been paid out. The ministry expects another BGN 1bn to be paid out by the end of 2012, which leaves another billion for 2013. on the positive side, repair works on 502km of the national road network have been completed with OPRD funding with more projects in the pipeline for approval. 

 

 

INVESTMENTS:

Ingram Micro to launch business operations in Bulgaria - report

US Ingram Micro Inc. will establish an office in Bulgaria, Standart News reported, citing unnamed sources. The US company will open some 200 new jobs in the country upon business activity launch in October. Ingram Micro is a Fortune 100 company active in technology distribution and sales. Eight other potential investment projects in the country were revealed recently. Three of them are related to the automotive industry and should have higher value added, according to economy ministry information. 

 

 

COMPANIES AND INDUSTRIES:

Cancelled Russian N-Plant Cost Bulgaria BGN 1.4 B So Far

State-run power utility NEK has spent nearly BGN 1.4 B on the site of Belene nuclear power plant since the start of the troubled and controversial project based on Russian technology, official data shows. The figures emerged as Rosatom Corp., Russia's state-run nuclear company, increased a claim against Bulgaria's National Electricity Co. from EUR 58 M to EUR 1 B for work on the currently cancelled project. Atomstroyexport, a unit of Rosatom, said it increased its claim filed with the International Court of Arbitration in Paris in 2011 to cover construction work and production costs of the two canceled nuclear reactors. The previous Socialist-led government hired in 2007 BNP Paribas SA to arrange a EUR 250 M loan, assess the financial risks and prepare tenders to select banks for funding the project at the Danube river town, whose price tag towered from EUR 4 B to EUR 10 B. NEK's poor results, triggered by a fall in power consumption, however forced it to breach the conditions on the loan, making it callable. It is believed that the major part of the money forked out for Belene so far, including direct state budget subsidies, was spent on drawing the project for the nuclear plant. BNP Paribas SA, France's largest bank by market value, who was hired by the previous Socialist government to help fund the construction of Belene, ditched the project in February 2010. Two and a half months earlier the German utility RWE abandoned plans to participate in the construction of a 2000MW nuclear plant in the Bulgarian Danube town ofBelene due to funding problems. RWE's departure from Bulgaria's new Belene nuclear plant put extra pressure on the new center-right government to find new shareholders while it redefines the scope of investment it needs. NEK initially held a 51% stake in the scheme and Borisov's government planned to cut its shares in the project to 20-30%, which will still allow the country to keep its blocking quota. Atomstroyexport was contracted in 2005 to build the plant for an initial 4 billion euros, but the costs later rose. After failing to agree on its cost and find Western investors however in March 2012 Bulgaria decided to abandon plans to build its second nuclear power plant.

 

Bulgaria cuts tariffs for new solar installations

The total installed capacity of photovoltaic parks soared to more than 700 MW by the end of August from 134 MW at the end of 2011. Bulgaria approved further cuts to guaranteed rates for new solar power installations, after already halving the tariffs in June due to lower costs, the State Energy and Water Regulatory Commission said, cited by Reuters. Ralitsa Stoyanova , a spokeswoman for the regulator, confirmed cuts of about 35 percent from Sept. 1 for large roof installations and nearly 28 percent for solar parks on the ground, as the cost of building solar generating facilities has fallen sharply. Renewable energy investors, who have poured millions of euros into solar parks in the European Union's poorest member state, have criticized the cuts, saying they will scare off badly-needed investment, and vowed to appeal against them. Solar energy parks in the small southeast European country have mushroomed after the government passed legislation guaranteeing tariffs over a 20-year period for solar investors. Companies such as U.S.-based AES Corp, Russia's Lukoil, South Korea's SDN, Saudi Arabia's ACWA Power and dozens of others rushed to take advantage of the incentives and the abundant sunshine in the Balkan country. The total installed capacity of photovoltaic parks soared to more than 700 MW by the end of August from 134 MW at the end of 2011, industry officials say. The surge of solar generation has however pushed up consumer prices by 13 percent in 2012 as the government seeks to recoup the cost of the subsidies. Power prices are politically sensitive in Bulgaria, where energy bills account for a huge part of monthly incomes, especially during the winter.

 

Three groups vie to inform Bulgarians on switchover to digital TV

Three candidates, all of them Bulgarian consortia, will be competing to inform the public about the country's planned switchover from analogue to digital terrestrial TV, the communications ministry said on Tuesday. The candidates, which have filed bids in the procurement tender by the deadline on Monday, are: consortium Max Inform, comprising OM Sofia and Market Links; TCTV tie-up formed by Archer Ideas, Piero 97 MA and Sova 5, and DVB-T Consult consortium, comprising Argent 2002, IPR Consulting, Smart and Market Test, the communications ministry said in a statement. The value of the contract is 10 million levs ($6.5 million/5.1 million euro). The winner must offer accessible information about the deadlines for halting analogue terrestrial TV broadcasting in Bulgaria and the choice of decoders necessary for the free watching of digital TV. In March, Bulgaria announced it will stop analogue TV broadcasting on September 1, 2013. There will be a six-month overlap when digital and analogue broadcasting will be used simultaneously, starting from March 1, 2013.

 

Bulgaria's Hotels Make BGN 190 M in July

Bulgarian hotels and other accommodation venues have generated a total of BGN 192 M in July 2012, according to data of the National Statistical Institute released Monday. The hotel revenues have increased by 72% compared with June 2012, the Institute said. Of those, BGN 160 M came from foreign tourists, while BGN 32 M came from Bulgarian travelers. In July 2012, there were a total of 2 517 accommodation venues in Bulgaria with more than 10 beds each, totaling 121 300 rooms and 271 900 beds. Thus, in July, Bulgaria's accommodation venues registered a total of 4.8 million hotel stays, with a total of 918 000 visitors, up by 30% compared with June 2012. The average occupancy rate of all hotels in Bulgaria was 59.7% in July, with four- and five-star hotels boasting a 68% occupancy rate, three-star hotels – 63.4%, one- and two-star hotels 40.5%. The average occupancy rate in July went up by 13.6% compared with June.

 

Bulgaria's Largest Non-Ferrous Plant Sold in Minutes

The assets of Bulgaria's bankrupt largest non-ferrous metal producer, the Lead and Zinc Complex (LZC, OTZK) in Kardzhali were sold Friday to the company Harmony 2012 Ltd. The sale concluded in just minutes, without any bidding and auction. The buyer was announced by the private law enforcer from the southern city of Kardzhali, Rosen Sirakov. The envelopes with the offers were opened at 9 am Friday, and it emerged that the bidders were actually three, not two as previously announced. The deadline expired at 5 pm Thursday. According to bTV, by 1 pm there has not been even one single offer, but two were filed at the last moment. The assets for sale, covering an area of 326 230 sq.m., have an initial price of BGN 8.3 M. The sale has been organized on the request of one of the three largest lenders, the Bulgarian First Investment Bank, FIB. Two of the bidders have deposited the mandatory fee of BGN 830 000. The third candidate was FIB, which as a lender was exempt from the deposit. FIB offered a purchase price of BGN 8.5 M with Value Added Tax, VAT, Finance & Consulting – BGN 8.4 M and the winner, Harmony 2012 Ltd. – BGN 8.6 M. The buyer's attorney declined any comment. The total debt of the plant is estimated at BGN 350 M, meaning the price is 35 times lower. The investor is purchasing only the buildings and the land. The machines have a new owner already. The tender was launched on August 13 with a month-long deadline, after a private law enforcer listed for sale 50% of severely financially troubled largest non-ferrous metal works, the Lead and Zinc Complex. The enforcer has taken up the measure after OTZK's main creditor – FIB won a court case against the factory and obtained a court order. The Lead and Zinc Complex owner Valentin Zahariev has been chronically failing to surface his loan from FIB, which has led to the present developments. Anonymous sources quoted by the BGNES information agencyat the time of the announcement of the tender said that the amount will cover only a fraction of theFIB credit. They also explained that should the assets fail to be bought, the bank will acquire a right to them, but only insofar as it can revitalize the metal factory to get back its loan. Zahariev's mismanagement of OTZK has caused a major business and social mishap in Bulgaria, after the owner failed for months to pay the factory workers' wages. Many employees have chosen to terminate their contracts with the Complex, some filing lawsuits against it, amidst fears the developments in recent months are spelling the death throes of Bulgaria's once prosperous largest non-ferrous metal works. The largest Bulgarian producer of non-ferrous metals, the Lead and Zinc Complex(LZC; OTZK) in the southern city of Kardzhali has been in trouble for quite a while, and the heavily indebted LZC will, most likely, have the fate of Kremikovtzi, the behemoth steel mill near Sofia, which no longer operates as a result of years of mismanagement. In the spring and summer of 2012, there was an attempt to find an investor to save the factory with Polish consortium Silesia emerging as a candidate to rent the complex for three years. On April 12 2012, after 40-day protests over delayed salaries, the workers at theLead and Zinc Complex received some of their money, totaling BGN 500 000, which were distributed on as a result of the sale of another troubled company, theGorubso-Madan mining firm. Both the LZC and the Gorubso Madan Mines in the nearby town of Madan were part of Intertrust Holding owned by Zahariev. However, both have descended into debt, leading to workers' protests, and an intervention by the state arranging the sale of both companies by Intertrust Holding. The Lead and Zinc Complex is still owned by Zahariev, the now-former owner of the Gorubso Madan metal mines. Gorubso Madan miners finally received their overdue wages after they had been staging protests for two weeks. Businessman Nikolay Valkanov has taken over the concession of the GorubsoMadan metal mines from Valentin Zahariev. Valkanov is a former VP ofMultigroup, the company of Bulgarian tycoon Iliya Pavlov, who was shot dead in 2003. Valkanov currently owns "Minstroy" and Gorubso Zlatograd, another mining company in Southern Bulgaria, and has a concession of the "Varba" mine.

 

 

 

 

 

 

Reported by:

GeorgiIliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea