RECENT NEWS
Reuters  Aug 27  Comment 
* South Stream gas pipeline remains frozen (Releads, adds details)
Euromoney  Aug 26  Comment 
Bulgaria’s ambition to join the euro is slipping further out of reach as the bank run on its fourth-largest lender Corporate Commercial Bank (KTB) brings allegations of corruption and political instability to the fore and further diminishes the...
BBC News  Aug 19  Comment 
Bulgaria suspends work on the Russia-led South Stream project, a pipeline stretching across the Black Sea to southern and central Europe.
Forbes  Aug 18  Comment 
Two months after it was taken into conservatorship by the Bulgarian National Bank (BNB) after a catastrophic bank run, Bulgaria's CorpBank is still closed.
newratings.com  Aug 14  Comment 
SOFIA (dpa-AFX) - Bulgaria's economy grew at a faster rate in the three months ended June, figures from the National Statistical Institute showed Thursday. Gross domestic product rose 0.5 percent from the first quarter, when the...
Wall Street Journal  Aug 12  Comment 
Bulgaria's state prosecutor charged the lead shareholder in the country's fourth-largest lender with embezzlement and issued an international warrant for his arrest, the latest step in the country's efforts to resolve its worst banking crisis in...
Financial Times  Aug 12  Comment 
Closed by central bank in June, it has not repaid holders of a $150m senior unsecured bond that matured on Friday, among them US and UK hedge funds
newratings.com  Aug 12  Comment 
SOFIA (dpa-AFX) - Bulgaria's consumer prices continued to decline in July but the pace of decrease slowed, figures from the National Statistical Institute showed Tuesday. The consumer price index fell 1.0 percent year-on-year in July, slower...
newratings.com  Aug 8  Comment 
SOFIA (dpa-AFX) - Bulgaria's industrial output increased at a slower rate in June, figures from the National Statistical Institute showed Friday. The industrial output rose 0.6 percent year-over-year in June, which was notably slower than...
New York Times  Aug 6  Comment 
Moving Tuesday to quell a deep political crisis, Bulgaria appointed a law professor as interim prime minister until national elections in October.




 
TOP CONTRIBUTORS

Bulgaria, the world's 74th largest country by Gross Domestic Product (GDP) joined the European Union on June 1, 2007.[1] Bulgaria's currency is the Bulgarian Lev (BGN), which was exchanged at 1.3 Lev per U.S. Dollar (USD) in 2008.[1] Since 2004, Bulgaria's economy has averaged more than 6% annual growth, attracting significant amounts of new foreign direct investment investment.[1] Between 2004 and 2008, foreign direct investment grew by 19.6% driven primarily by increased investments in Bulgaria's Real Estate, Energy, and Manufacturing sectors.[2][3]

Bulgaria's agriculture, industry, and services sectors account for 4.6%, 28.7%, and 66.7% of its GDP, respectively.[1] Bulgaria's primary agricultural crops include wheat, corn, barley, sugar beats, sunflowers and various fruits.[1] The country's dominant industries are Mining and Energy. Bulgaria's abundant natural resources like copper, lead, zinc, and coal are Bulgaria's main exports, accounting for 11.4% of Bulgaria's exports in 2008.[3] Additionally, over 40% of Bulgaria's energy is generated from coal.[4] Bulgaria's energy production industry accounts for 18.2% of the country's overall industrial GDP as its Southeast Europe's primary exporter of electricity.[5] Bulgaria's services sector is mainly comprised of financial services and tourism.[5] In particular, Bulgaria's natural landscapes attract almost 6 million visitors annually which contribute significantly to Bulgaria's economic growth.[6]

However, corruption in Bulgaria's public administration and the presence of organized crime remain challenges to Bulgaria's economic development.[1] Furthermore, Bulgaria's relatively high inflation rate (7.8% in 2008) and dependence on foreign direct investment impedes its economic growth.[1]

Major Bulgarian Companies

Agriculture

  • Zarneni hrani Bulgaria AD is an agribusiness company that operates throughout the farmer-user food chain, selling seeds, fertilizers and other farming services as well as manufacturing biofuels.[7]
  • Bulgartabac Holding AD manages and finances a variety of companies across the Tobacco industry including the cultivation and processing of tobacco and manufacturing of cigarettes.[8]
  • Mekom AD is a food processing company that specializes in the production of livestock.[9]

Telecommunications

Energy

Banking

Manufacturing

Real Estate

Tourism

Stock Exchange

The Bulgarian Stock Exchange or Sofia had a market capitalization of BGN 12.46 billion at the end of 2008, down 57% from a year earlier because of the global economic downturn.[22]

Trends and Forces

Cheap, Well-Educated Labor and Bargain Real Estate Provide Investment Advantages

Bulgaria's cheap labor and resources, coupled with favorable corporate tax rates render Bulgaria as somewhat of an investment haven. The average Bulgarian monthly salary is $165, compared to the EU average of $2,396.[23] Additionally, Bulgarians spend 14 years on average in school and 98.2% of the country's population is literate.[23] This cheap, well-educated labor helps minimize companies' labor costs without compromising the education and productivity of its employees. Furthermore, Bulgaria's corporate tax rate reaches 0% in some regions, maintaining higher profit margins for firms.[23]

Bulgaria's Heavy Dependence on Foreign Direct Investment Jeopardizes Economic Growth

Because of its reliance on foreign investment to foster economic growth, Bulgaria's economy is vulnerable to any downturns in the global economy that would reduce lending. In 2008, foreign investments accounted for 18% of Bulgaria's Gross Domestic Product (GDP), ranking highest in the European Union in amount of foreign investments as share of GDP[24] In January 2009 foreign direct investments dropped 37% from a year earlier because of credit constraints associated with the 2008 Financial Crisis.[25] In particular, foreign investment in Bulgaria's Real Estate industry declined 66% in January 2009.[25] Stoyan Stalev, chief of Bulgaria's association of investments expects that the global financial crisis may reduce foreign direct investment in Bulgaria by up to 50% in 2009.[26] As a result, The Economist believes that Bulgaria's GDP growth will decrease by 3.8% during the year.[3]

Compounding Bulgaria's investment woes is its large Current account deficit- in 2008, Bulgaria's current-account deficit totaled $11.7 billion or 23.4% of GDP, up from 22% of GDP in 2007.[3] A high current-account deficit is bad for Bulgaria because it exacerbates their preexisting financial needs and may decrease foreign investor confidence. However, the 2008 Financial Crisis has reduced imports to Bulgaria and as a result, Bulgaria's current-account deficit has decreased as well- in 2009 the IMF expects that Bulgaria's deficit will shrink to 13.9% of GDP.[3]

High Corruption Rates Stifle Investment and Economic Growth in Bulgaria

Bulgaria's corruption issues throughout its judicial and financial institutions continue to impede its economic growth. Significant amounts of foreign aid and investment is lost or stolen each year due to corruption and fraud.[3] For example, 54% of respondents in a 2009 Transparency International survey indicated their beliefs that Bulgarian businesses pay bribes to secure favorable legislative decisions.[27] Because of these issues, the European Commission froze €800 million or about $1.1 billion in aid in 2009, with options of canceling the aid entirely.[28]


References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 CIA Bulgaria World Factbook
  2. "Bulgaria's FDI expected to grow 10 per cent - State Investment Agency" propertywisebulgaria.com
  3. 3.0 3.1 3.2 3.3 3.4 3.5 Economist.com Bulgaria Fact Sheet
  4. "Bulgaria Mining Report 2008"
  5. 5.0 5.1 Wikipedia: Industry of Bulgaria
  6. Wikipedia:Tourism in Bulgaria
  7. Zarneni hrani Bulgaria AD Google Finance Page
  8. Bulgartabac Holding AD Google Finance Page
  9. Mekom AD Google Finance Page
  10. Bulgarian Telecommunications Company Google Finance Page
  11. Petrol AD Google Finance Page
  12. Evrohold Bulgaria AD Google Finance Page
  13. CB First Investment Bank AD Google Finance Page
  14. Sopharma Google Finance Page
  15. Druzhba Staklarski Zavodi Google Finance Page
  16. Monbat AD Google Finance Page
  17. Pirinhart Google Finance Page
  18. Euroterra Bulgaria AD Google Finance Page
  19. Investment Properties ADSITS Google Finance Page
  20. Albena AD Google Finance Page
  21. Pamporovo AD Smolyan Google Finance Page
  22. Sofia 2008 Annual Report, pg. 13
  23. 23.0 23.1 23.2 InvestBulgaria.com
  24. "Bulgaria FDIs Tower to 7% of GDP, Europe's Highest" NoInvite.com
  25. 25.0 25.1 "Bulgaria: FDI decrease dramatically" 3/16/2009
  26. "Foreign investments in Bulgaria might drop down with 50%" News.bg 5/27/2009
  27. "Transparency International: Bulgaria Still with High Corruption" NoInvite.com 6/3/2009
  28. "Bulgarian rhapsody" TheEconomist.com 5/14/2009

Companies in the Investing in Bulgaria Industry (413)

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