1 Βulgaria * Macroeconomic & Business Environment * Bilateral Economic & Commercial Relations *...

19
1 Βulgaria * Macroeconomic & Business Environment * Bilateral Economic & Commercial Relations * Prospects Theologia Voulgari Second Secretary for Economic & Commercial Affairs Embassy of Greece in Sofia

Transcript of 1 Βulgaria * Macroeconomic & Business Environment * Bilateral Economic & Commercial Relations *...

11

Βulgaria

* Macroeconomic & Business Environment* Bilateral Economic & Commercial Relations * Prospects

Theologia VoulgariSecond Secretary for Economic & Commercial Affairs Embassy of Greece in Sofia

22

General Information

Territory – 110.994 sq. Km Population – 7.3 million Capital: Sofia – 1.4 mln Biggest cities: Plovdiv, Varna, Bourgas, Rousse Main airports: Sofia, Plovdiv, Varna, Bourgas Ports: Varna, Bourgas Danube ports: Vidin, Lom, Rousse Currency: Bulgarian Lev (BGN) pegged to Euro (EUR 1

= BGN 1.95583) Pan-European Transport Corridors (4, 7, 8, 9, 10)

33

Macroeconomic Environment-Macroeconomic Environment-Latest dataLatest data

“Sluggish growth” in 2012: GDP expanded by 0.8% The main growth driver: Domestic demand Final consumption stepped up by 1% due to growth in Final consumption stepped up by 1% due to growth in

household expenditures - at the same time government household expenditures - at the same time government consumption decreased by 4.4%.consumption decreased by 4.4%.

The import of goods was up 3.4% supported by The import of goods was up 3.4% supported by domestic demanddomestic demand

ExportsExports declined as a result of weaker demand from declined as a result of weaker demand from Bulgaria’s main trading partners. Bulgaria’s main trading partners.

Current Account Balance:Current Account Balance: -0.7 (2011 +1.7) -0.7 (2011 +1.7)

44

Macroeconomic Environment – Macroeconomic Environment – Latest dataLatest data

Harmonized Index of Consumer Prices: 3.4% (2011-Harmonized Index of Consumer Prices: 3.4% (2011-2.2.4%4%))

Gross value added increased slightly. Positive contributions from agriculture, manufacturing,

trade, transportation and accommodation, public administration, entertainment. NegativeNegative from the rest. from the rest.

The construction sector posted a 12.6% declineThe construction sector posted a 12.6% decline

After three years of strong contraction, After three years of strong contraction, investment investment activityactivity stabilised over 2012 supported mainly by stabilised over 2012 supported mainly by public projects and some recovery in FDI. public projects and some recovery in FDI.

55

Macroeconomic Environment - Macroeconomic Environment - Latest data Latest data

Registered unemployment Registered unemployment increased further to increased further to 11.9%11.9% (2011 -11%11%))

The The average wage in the economy average wage in the economy continued to continued to increase; according to preliminary data by 11.7% and increase; according to preliminary data by 11.7% and 9.1% in nominal and real terms respectively. 9.1% in nominal and real terms respectively.

Labour productivity Labour productivity also kept expanding, up 5.4% also kept expanding, up 5.4% in 2012. in 2012.

This resulted in This resulted in real unit labour cost real unit labour cost decrease of 2% decrease of 2% yoy. Favorable labour productivity developments were yoy. Favorable labour productivity developments were determined primarily by the trade and real estate determined primarily by the trade and real estate sectors.sectors.

66

Macroeconomic Environment – Macroeconomic Environment – Latest data Latest data

Strong Fiscal positionStrong Fiscal position: Improved fiscal deficit from to : Improved fiscal deficit from to 2% of GDP in 2011 to 1% of GDP in 20122% of GDP in 2011 to 1% of GDP in 2012

Expectations for GDP in 2013 Expectations for GDP in 2013

- IMF:- IMF: 1.5% 1.5%

- European Commission: 1.4% and 2% for 2014- European Commission: 1.4% and 2% for 2014

- EBRD: 1.9% for 2013 - EBRD: 1.9% for 2013

- World Bank: 1.8% (initially 2.5%)- World Bank: 1.8% (initially 2.5%)

77

Business Environment: Business Environment: Generally positiveGenerally positive

Macroeconomic & financial stability (low budget deficit and government debt)

Low cost of doing business: favorable taxes & lowest cost of labor within the EU

Educated and skilled workforce Stable currency (Lev has been pegged to the Euro

since 2002) Government support for priority investment projects Member of E.U., NATO, WTO

88

Business EnvironmentBusiness Environment

The business climate indicator rose by 5,7% compared to January 2012.

Respondents had positive expectations about demand and orders in the coming months.

For the first time since mid-2012 there was an improvement across all sectors of the economy.

The assessment of the current and future business situation was more favourable and optimistic.

99

Business EnvironmentBusiness Environment –Main types of companies

1. Limited Liability Company (OOD)- Minimum Capital: 2 leva(~ € 1)

2. Joint Stock Company(AD) - Minimum Capital: 50.000 leva (~ € 25.000)

1010

Business EnvironmentBusiness Environment –Taxation

Corporate income tax applies at a uniform rate of 10%.

Individual income tax is 10 % flat tax rate.

Withholding tax at 5% is deducted from dividends distributed by Bulgarian resident companies.

VAT rate is 20%.

Real estate tax ranges among 0.01 % - 0.45%

1111

Government support under the Investment Promotion Act (IPA)

Minimum investment amounts must exceed €10m - € 3.5m in regions with high unemployment and- € 2m for investment projects in high-tech services

Benefits for certified investors include: – Shortened administrative procedures – Preferential acquisition of state or municipal land – Financial support for professional training / education – Infrastructure subsidies – Individual administrative services

1212

Government support - Sectors

Manufacturing Research & development Education Healthcare High-tech services Warehousing and logistics

1313

Challenges

Bureaucracy Corruption Slow moving court system A complicated and often non transparent tendering

process. The fact that the country remains one of the EU’s

poorest countries with limited consumer disposable income with a rapidly aging population of 7,3 million

The current political situation.

1414

Greek investment in BulgariaGreek investment in Bulgaria

Greece holds the third place within foreign investors in Bulgaria after Austria and the Netherlands with overall investment of €3,664 million.

1515

Greek investment in Greek investment in BulgariaBulgaria

1616

Bilateral Trade Relations

For Bulgaria, Greece is the 5th most important trade partner, while, at the same time, Bulgaria is the 6th bigger importer of Greek goods worldwide (2011)

Greece exports a wide range of products (around 2.500 industrial και 400 agricultural) in Bulgaria

Despite the international economic downturn, the Greek-Bulgarian trade volume continually increases.

The trade balance is positive for Greece According to the latest preliminary data for

2012 (11 months) Greek exports increased by 17,5% and reached € 1,41 billion

1717

Bilateral Trade Relations

Million euros 2008 2009 2010

2011

Volume of Trade 2.424

1.817,3

2029,1

2.395,6

Greek Exports 1.251 968,21.059,

61.239,2

Greek Imports 1.173 849,1 969,5 1.156,4

Current Account Balance

+77,9

+119,0

+90,1 +82,8

Source: ΕΣΥΕ

1818

PROSPECTSPROSPECTS

TourismTourism Food & drink productsFood & drink products Infrastructure Projects and Real Estate Infrastructure Projects and Real Estate

DevelopmentDevelopment Environmental TechnologiesEnvironmental Technologies Information and Communication TechnologiesInformation and Communication Technologies Automotive Automotive Healthcare/MedicalHealthcare/Medical

1919

Thank you for your attention! Thank you for your attention!

Theologia VoulgariTheologia Voulgari

Office for Economic & Commercial AffairsOffice for Economic & Commercial Affairs

Embassy of Greece in SofiaEmbassy of Greece in Sofia

[email protected]@grembassysofia.org