Archive for February 12, 2009

Bulgaria’s 2008 C/A Gap Seen Widening to up to 23.4%/GDP, Narrowing in 2009

Bulgaria’s current account gap for 2008 is seen widening to up to 23.4% of the country’s gross domestic product (GDP) before it narrows in 2009 on lower trade deficit and tightened external financing, analysts polled by SeeNews said.

The country’s current account deficit through November widened to a preliminary 21.9% of the GDP projected for 2008 from a revised 18.6% of GDP in the same period a year earlier, according to latest data available. The current account gap rose to 7.465 billion euro ($9.68 billion) through November.

In 2007, Bulgaria’s current account gap was 21.8% of GDP, up from 17.8% a year earlier.

The country’s central bank is due to release on Friday the end-2008 current account figures.

Agata Urbanska, an Emerging Europe senior economist with ING Bank, London, said she sees the shortfall on Bulgaria’s current account reaching 23.4% of GDP as there will be generally moderate negative adjustments across most components of the current account that have cumulated in current account deficit widening.

The main factors explaining the rise in the country’s current account deficit last year include the widening of the trade gap, the negative income balance as well as the decline of the surplus on the services account between 2007 and 2008, Urbanska told SeeNews, adding that only current transfers surplus increased last year.

The Sofia-based Centre for Economic Development (CED) expects the country’s current account deficit for the whole of 2008 widening only a little, to some 22-23% of GDP, due to broadening trade deficit and rising outflow of foreign investments.

“The reason for the widening current account gap for 2008 is the increase of imports due to surging energy and raw material prices, and not a decline in exports, whose share remains at 66.8% of GDP, unchanged from 2007,” CED said in a report released earlier this week.

According to BNP Paribas analyst Michal Dybula, the shortfall on the current account “will be still high.” He sees the current account deficit for 2008 at some 21.9%.

“The real thing is that the relative domestic demand has been way stronger than in the major trading partner economies and basically the tendency we have observed in the first nine months of the year are pretty likely to contribute to a higher current account deficit figure for the full year,” Dybula told SeeNews.

“Though I do believe that with a growing let’s say inability to refinance this external deficit […] we would see a deceleration of the current account deficit,” he said.

Categories: Bulgarian Economy Tags: ,

Bulgarian Hopes up after Draw with Switzerland

Bulgaria’s hopes for qualifying for the 2010 FIFA World Cup in South Africa were lifted up after a 1:1 draw in a friendly against Switzerland in Geneva on Wednesday.Coming off from a disastrous end of 2008 (a 6:1 loss to Serbia, in a friendly) the team changed managers. Now led by Stanimir Stoilov, the Bulgarian football team displayed a significantly better game, that set experts’ hopes up.

It was the 32nd minute when Litex Lovech striker Ivelin Popov put the ball in the Swiss net after a successful pass by his club teammate Stanislav Manolev. The Swiss however took advantage of a misunderstanding in the Bulgarian defense and leveled the score seconds before half time.

Bulgaria dominated through most of the second half missing a lot of goal opportunities. The Swiss once again could score in the game’s last minutes, but the shot was deflected.

Guests in the Bulgarian National Television’s studio, that broadcast the game, commented that the team had displayed a quality of game that it hadn’t achieved in a long time, as morale seemed to be high.

Bulgaria’s first official World Cup qualifier for 2009 is an away game to the Republic of Ireland on March 28th.  /bnn/

Categories: Bulgarian Sports Tags: ,

Swiss Alpiq to build 50 MW wind park in Bulgaria

Switzerland’s leading energy company Alpiq will invest 80 million euros ($103.4 million) to build a wind energy park in Bulgaria to increase its renewable energy production, the economy ministry said on Wednesday.

Construction of the 50 megawatt (MW) park near the town of Kazanluk in central Bulgaria will start in the coming months and is expected to begin electricity production in 2010, the ministry said in a statement.

Bulgaria’s installed wind power capacity totals 70 MW, generating just over 1 percent of its electricity consumption. The Balkan country gets about 43 percent of its power from coal and 40 percent from nuclear energy.

It plans to increase the share of renewable energy to 16 percent by 2020 as part of European Union efforts to curb greenhouse gas emissions from fossil fuels and expand “green” energy production.

U.S. energy company AES Corp. (AES.N) has recently announced plans to build a 270 million euros wind park on Bulgaria’s Black Sea coast with a capacity of 156 MW by the end of 2009.

AES has said it wants to build a second wind park of a minimum 100 MW capacity in the north of Bulgaria.

Austrian power utility EVN (EVNV.VI) also plans to build a 50 MW wind farm on the Black Sea coast.

Bulgaria along with other ex-communist eastern European countries, which rely mainly on coal and nuclear energy for their electricity production, are lagging behind their western neighbours on meeting the EU’s clean energy goals.

The bloc wants 20 percent of energy demand to be sourced from renewables such as solar, wind, wave, hydro and biomass by 2020, versus 8.5 percent now. (Reporting by Anna Mudeva; editing by James Jukwey)

Categories: Bulgarian Economy Tags: ,

Global financial crisis sparks unrest in Bulgaria.

Bulgarian police vowed on Monday to protest until their demands for better salaries and working conditions were met.

Farmers blocked the only Danube bridge link with Romania and rallied across Bulgaria last week demanding the government set a minimum protective price for milk and stop imports of cheap substitutes, such as powdered milk. Prosecutors and authorities said earlier this week they had launched mass checks of milk and meat products safety following the protests.

Last month Bulgarians staged rallies to demand economic reforms in the face of the global slowdown, calling on the Socialist-led government to act or step down. One rally in Sofia turned into a riot.

Categories: Bulgarian Economy

Irish investors hit by collapse of Bulgarian property agent

SCORES OF Irish investors have been hit by the collapse of a UK-based agent specialising in Bulgarian properties.


Bulgarian Dreams, which once claimed nearly 30 per cent of its customers came from Ireland, has ceased trading, shortly after it featured in a critical BBC documentary.

The company has blamed “extraordinarily difficult economic conditions” for its demise.

In January 2008, the Association of International Property Professionals said it expelled the company for breaching the association’s code of conduct. At the time, Bulgarian Dreams claimed it had not been expelled but had resigned some time earlier.

Exactly how many Irish customers of Bulgarian Dreams are affected is not clear, but Sofia-based lawyer Milen Hristov, who is filing claims on behalf of aggrieved customers, said he had received inquiries from a number of Irish purchasers.

Bulgarian Dreams marketed a number of its developments in Bansko, Pomporovo and other Bulgarian locations at property exhibitions in Ireland in recent years. Bulgarian apartments were popular with investors seeking low-price entry into the overseas property market and fast growth rates.

However, an oversupply of apartments on the market, together with the downturn in property markets, saw demand plummet and many investors are now left holding apartments that are impossible to sell.

Overseas property consultant Diarmuid Condon likened the collapse of the Bulgarian property market to events nearer home: “Bulgarian cities are doing okay, but the resorts where Irish investors have bought are like ghost towns. Building has stopped, apartments aren’t selling and developers can’t raise finance. There’s an awful lot of people sitting on properties that were supposed to have been completed but aren’t.”

Bulgarian Dreams advertised itself as a specialist real estate agent with “unparalleled local knowledge” of the local property market.

However, it came in for criticism from some customers who claimed it was not delivering on its promises. In particular, there were complaints about the non-completion of developments and missing facilities that had been promised.

The company said the problems had nothing to do with it and referred customers to the development companies.

Last year, it abandoned plans to build a €100 million Black Sea resort with an Arabic theme, which had been criticised by environmentalists and architects in Bulgaria.

Earlier this week, the company featured on BBC’s Watchdog programme, which said it was aware of 80 customers whose apartments remained uncompleted.


This article appears in the print edition of the Irish Times

Categories: Uncategorized Tags: ,

Brussels Scolds Bulgaria over Political Parties Financing

The tone in the report of the European Commission on the development of Bulgaria will be critical, the report is due to be presented today, reported the Bulgarian National Television. According to sources, the document will again read that Bulgaria suffers significant drawbacks in combating corruption and organized crime. Brussels continues insisting on more transparent assignment of tasks and priorities in the two major law enforcement institutions – the Ministry of Interior and the State Agency for National Security (SANS) as well as on parliamentary monitoring over the work of SANS. According to BNT, the Commission’s report insists on broader reforms in the processes of crime investigation i.e. the pre-trial phase that allegedly would lead to “easier access of the evidence material to the judicial process”. Reportedly, Brussels discovered the lack of adequate legislature on financing of political parties as well as adequate legal measures for confiscation of property obtained though illegal means. Brussels’s main advice is that verdicts should be passed on criminals who have long been known to the police.