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Wall Street Journal  Oct 23  Comment 
Bulgaria’s central bank said it is ready to let the country’s fourth-largest bank fail but urged parliament to approve the government’s topping up a fund to compensate depositors after an audit found a 4.22 billion lev ($2.73 billion) hole...
newratings.com  Oct 14  Comment 
SOFIA (dpa-AFX) - Bulgaria's consumer prices fell at a faster rate in September, figures from the National Statistical Institute showed Tuesday. Consumer prices dropped 0.8 percent year-on-year in September following the 0.6 percent fall in...
Benzinga  Oct 13  Comment 
Textron Systems Marine & Land Systems, a Textron Inc. (NYSE: TXT) business, announced today a $15,221,528 firm-fixed-price, foreign military sales contract from the U.S. Army Contracting Command, Warren, Mich., to provide 10 COMMANDOâ„¢ Select...
Reuters  Oct 9  Comment 
Czech power utility CEZ said on Thursday it was discussing setting up a project company with Bulgaria's state owned Bulgarian Energy Holding (BEH) as an option to avoid the closure of its Varna thermal power plant.
Reuters  Oct 8  Comment 
The main shareholder of Bulgaria's Corporate Commercial Bank (Corpbank) said on Wednesday he was ready to give up his stake to save the lender, which was forced to shut in June...
Financial Times  Oct 6  Comment 
Centre-right party fails to win outright majority in Sunday’s election
New York Times  Oct 6  Comment 
The country faced the prospect of another shaky governing coalition as it grapples with a sluggish economy and banking crisis.
Gold Stocks Today  Oct 4  Comment 
Bulgarians will go to the polls on October 5th to elect new members of its parliament and thus a new government. Before casting their votes, voters should reflect on the economic records of Bulgaria’s governments since 1995. Every cou...




 
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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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