Transcript competitiveness of the bulgarian economy and energy

COMPETITIVENESS OF THE
BULGARIAN ECONOMY AND ENERGY
Petar Dimitrov
Minister of Economy and Energy
June 2008
FINANCIAL STABILITY

Currency Board since 1st July 1997

Bulgarian currency rate fixed to the Euro

Foreign reserves of € 12 936.8 million of the Bulgarian National Bank
up to 30 April 2008

Resources of € 4 135.4 million for the Fiscal budget, calculated on the
basis of programmed currency rates as of 31 March 2008

Budget surplus of € 547 million as of 31 March 2008
2
MACROECONOMIC ENVIRONMENT
Real GDP Growth (%)
7.0
6.6
6.2
6.5
6.2
6.1
6.2
5.4
5.0
%
5.0
4.5
4.1
3.9
2.9
3.0
2.8
2.4
2.0
2.4
2.4
1.7
1.2
1.3
1.0
2000
2001
2002
2003
2004
EU-25
2005
2006
2007
2008f
2009f
Bulgaria
Source: NSI, EUROSTAT, Ministry of Finance
 High and constantly rising economic growth
 Bulgaria is among the leaders of CEE countries
 The main contributor to the GDP growth is the industrial sector
3
MACROECONOMIC ENVIRONMENT
 Low levels of unemployment rate (under 7%)
18%
18.0%
17.9%
16.3%
15%
13.5%
12%
12.2%
10.7%
9.1%
9%
6.9%
6.5%
2007
2008 F
6%
2000
2001
2002
2003
2004
2005
2006
Source: National Employment Agency
•
Decrease of the unemployment rate by 5.25 % compared to the end of 2004
•
Financial backing of Euro 1.2 bln for investments in human resources under the
“Human Resources Development” Operational Program
4
INTERNATIONAL POSITION OF BULGARIA
Business conditions – classification of the World Bank
Country
2006
2007
2008
BULAGRIA
59
54
46
Romania
71
55
48
Slovenia
56
53
55
Turkey
84
65
57
Macedonia
94
95
75
Serbia
95
84
86
Croatia
134
120
97
Greece
111
95
100
Approx. for the Balkans
91
86
82
Source: World bank – Doing Business
Now Bulgaria is ranked:
• 46th among 178 countries in terms of business conditions according to the World
Bank Doing Business Report
• 39th in terms of competitiveness out of 55 top economies, according to the
International Institute for Management Development (IMD)
• 79th among 131 countries in terms of competitiveness according to the World
5
Economic Forum, Davos
CREDIT RATING
Moody's
Standart&
Poors
Fitch
Aaa
AAA
...
…
…
…
A3
A
A
A
Baa1
A-
A-
A-
27.06.2007
Baa2
BBB+
BBB+
BBB+
31.01.2008
Baa3
BBB
BBB
BBB
26.11.2007
Ba1
BBB-
BBB-
BBB-
23.02.2007
Ba2
BB+
BB+
BB+
Ba3
BB
BB
BB
Latest credit rating
assigned
B1
BB-
BB-
BB-
B2
B+
B+
B+
27.09.1996
B3
B
B
B
First credit
rating
assigned
...
…
…
…
C
D
D
D
Subinvestment Investment
rating rating
AAA
Japan Credit
Rating Agency
AAA
Fitch has
confirmed the
long-term credit
rating of
Bulgaria,
however the
long-term
credits
perspective has
been
lowered from
stable to
negative. Fitch
has revised the
Region outlook
due to the
change of
macroeconomic
conditions.
Source: Ministry of finance
•
An investment rating was assigned to Bulgaria for the first time in 2004. Since 2005
the international credit rating agencies have increased Bulgaria’s credit rating 13
6
times.
FOREIGN TRADE , (USD bn)
32.0
Export(fob)
29.9
Import (fob)
28.0
23.0
24.0
20.0
18.4
18.3
15.0
16.0
11.8
12.0
8.4
8.0
6.2
5.5
4.0
4.0
5.4
3.8
0.0
1999
2005
2006
2007
03/2007
03/2008
Source: BNB
 The Bulgarian exports increased more than three times since 1999 and in
2007 г. amounted to USD 18.4 bn
7
EXPORT
Major export destinations 2006/2007 (USD million)
Turkey
Germany
Italy
Greece
Belgium
Serbia
Romania
France
Russia
425
228
0
426
733
888
200
448
400
627
579
600
631
800
2007
825
982
1 638
1 882
1 000
2006
1 150
1 200
1 334
1 400
1 513
1 600
1 735
1 800
1 448
2 000
1 920
2 116
2 200
USA
Source: NSI
8
BILATERAL TRADE TURNOVER WITH USA
Export
2006
2007
2003
2004
84.7
66.3
323.1
2005
356.6
273.2
330.5
172.2
270.5
2002
424.8
2001
425.7
464.0
2000
190.8
190.7
1999
189.5
1998
Export
454.3
0
193.8
100
146.6
200
111.2
194.5
300
284.7
400
313.5
439.5
500
03/2008
Import
Source: NSI
•
In 2007 Bulgarian export for the USA came up to USD 424.8 million and
decreased by 0.2% as compared to the year 2006. The import from the USA
amounted to USD 323.1 million, or decreased by 30.4% as compared to the same
period of the year 2006 . The trade balance is positive for Bulgaria and amounts to
USD 101.7 million.
9
STRUCTURE OF TRADE TURNOVER WITH USA
BY SECTORS FOR 2007
Export from Bulgaria
Import from USA
(%)
(%)
Petrol oils and oils from bituminous
minerals, other than crude ones
35.2
Mineral products
40.5
Products from food processing industry
11.2
Machine and Machinery
26.3
Textiles
10.6
Transport facilities
8.4
Machines and Equipment
10.2
Products from chemical industry
4.8
Optical and photographer’s instruments
4.2
Products from chemical industry
8.0
Optical and photographer’s instruments
4.2
Products from food processing industry
3.9
Base metals and articles
2.8
Base metals and articles
2.9
Live animals
2.7
Plastic articles
2.2
Plaster and cement articles
2.2
Textiles
1.1
Other
5.8
Other
12.8
Source: MEE
10
FAVORABLE BUSINESS CLIMATE
Bulgaria is ranked
2nd in the Business
climate rating for
EU-27 (after
Denmark)
Source: Association of European Industrial Chambers
11
FAVORABLE BUSINESS CLIMATE
According to the World Bank Report Bulgaria is ranked 1st among
178 countries in successful implementation of tax reforms for the
period 2006-2007
• 10% corporate tax since 2007 (34.3% in 1999)
• 0% corporate tax in 138 municipalities with unemployment rate higher than
the average level
• 0% capital gains tax
• 5% dividend tax from January 1, 2008
• Lower social security burden with 6 percentage points in 2006 and by other
3 percentage points since October 1, 2007
• 10% “flat tax” of incomes of physical persons since 2008
12
CORPORATE TAX FOR 2008 (%)
40,0%
35%
32,5%
33%33,3%
29,5% 30%
30,0%
27,5%28%
26%
25%25% 25% 25%25,5%
21% 21%
20,0%
22%
19% 19%
15% 15% 15%
16% 16%
12,5%
Source: EU Taxation Database, World Wide Taxes - www.worldwide-tax.com
Malta
France
Belgium
Spain
Great Britan
Luxembourg
Sweden
Italy
Finland
Netherlands
Denmark
Austria
Portugal
Greece
Slovenia
Estonia
Czech Rep.
Poland
Slovakia
Hungary
Romania
Germany
Latvia
Lithuania
Ireland
Cyprus
0,0%
10% 10%
Bulgaria
10,0%
13
PERSONAL INCOME TAX FOR 2008
(MAXIMUM RATE %)
60,0%
59%
56%
52%
50% 50%
50,0%
40% 40% 40% 40%
40,0%
41% 41%
42%
43% 43%
45%
38%
35%
30%
30,0%
24%
20,0%
19%
36%
31,5%
25%
21%
15% 16%
Source: EU Taxation Database, World Wide Taxes - www.worldwide-tax.com
Denmark
Sweden
Netherlands
Belgium
Austria
Germany
Spain
Italy
Portugal
Slovenia
Ireland
France
Great Britain
Greece
Poland
Luxembourg
Hungary
Malta
Finland
Cyprus
Lithuania
Latvia
Estonia
Slovakia
Romania
Czech Rep.
0,0%
10%
Bulgaria
10,0%
14
SOCIAL INSURANCES
SOCIAL INSURANCES PAID BY THE EMPLOYER IN 2006
(% of total employer’s expenses, incl. salaries, insurances, compensations, tuition’s expenses ,etc)
Sweden
30.6%
Belgium
30.3%
Litva
28.2%
Hungary
26.9%
Romania
26.1%
Czech.rep.
26.1%
Estonia
25.1%
Spain
24.9%
Slovakia
24.6%
Austria
23.5%
Germany
23.3%
Portugal
21.2%
Bulgaria
20.9%
Finland
20.8%
Latvia
20.6%
Luxemburg
15.2%
Cyprus
15.1%
Slovenia
Source:Eurostat
0%
*
13.4%
5%
10%
15%
20%
25%
30%
35%
*Note: In 2007 social security burden paid by the employer is reduced by 2.5%
15
LABOR COST
AVERAGE MONTHLY EXPENDITURES FOR THE EMLOYERS IN 2006 (incl. salaries, insurances,
compensations, etc)
Luxemburg
4625
Sweden
4518
France
4382
Belgium
4047
Germany
3868
Austria
3827
Finland
3685
Spain
2203
Cyprus
2091
Slovenia
1673
Portugal
1618
Malta
1445
Czech.rep
1028
Hungary
947
Poland
889
Estonia
840
Slovakia
775
Litva
646
Latvia
532
Romania
414
Bulgaria
243
0
Source: Eurostat
1000
2000
euro per month
3000
4000
5000
16
Source: Eurostat
0.055
Litva
0.081
0.084
0.086
0.088
0.090
0.092
0.093
0.095
0.095
0.096
Hungary
Romania
Portugal
Belgium
Malta
The Netherlands
Slovakia
Germany
England
Luxemburg
Ireland
0.113
0.105
0.081
Spain
Cyprus
0.079
Austria
0.103
0.078
Czech.rep.
0.060
Italy
0.075
0.070
Slovenia
Greece
0.064
0.054
Finland
Denmark
0.054
Poland
0.063
0.054
France
Sweden
0.053
Estonia
0.047
0.000
Bulgaria
0.020
0.044
0.082
0.040
Latvia
EU 27
ELECTRICITY PRICES IN 2007
FOR FINAL INDUSTRIAL CONSUMERS
(EURO/ kWh)
0.120
0.100
0.080
17
2.0
Source: Eurostat
7.8
8.0
8.4
Poland
Finland
France
Portugal
Slovakia
The Netherlands
Italy
Austria
12.2
11.1
Sweden
Germany
10.6
6.0
England
9.9
7.6
Slovenia
Luxemburg
7.6
Romania
9.5
7.3
Spain
Hungary
7.3
7.5
8.9
7.1
8.5
6.9
6.0
Litva
Belgium
5.8
Denmark
6.6
5.3
Latvia
Czech.rep.
5.2
0.0
Bulgaria
3.7
8.9
4.0
Estonia
EU27
NATURAL GAS PRICES IN 2007
FOR FINAL INDUSTRIAL CONSUMERS
(EURO/GJ)
14.0
12.0
10.0
8.0
18
INVESTMENT CLIMATE
Bulgaria
Slovakia
3.16
2.79
1.04
1.04
1.56
1.79
Estonia
2.44
0.96
2.2
Czech Republic
2.43
1.1
2.05
Latvia
2.64
0.91
Poland
2.59
1.17
Hungary
2.54
0.95
1.98
Lithuania
2.6
0.83
1.98
Romania
Russia
Ukraine
Financial Score
2.88
2.61
2.79
People Score
2
0.87
1.38
0.98
1.79
1.53
1.16
1.09
Environmental Score
Source: A.T. Kearney 2007 Global Services Location Index
• According to the report of A.T. Kearney from 2007 Bulgaria is ranked 9th in the
World and 1st in Central and Eastern Europe as most attractive country for
business;
• According to UNCTAD Bulgaria takes 7th place as the most attractive investment
destination. Bulgaria has moved up in this rating by 14 places in comparison with
the 2005 report.
19
FOREIGN DIRECT INVESTMENTS
25
FDI, 2007
(% of GDP)
21.1
20
15
11.7
10
7.9
5
5.8
5.2
5.0
4.2
4.0
3.8
3.0
2.5
1.9
1.1
Source: BNB and Bank Austria
Creditanstalt
FDI IN BULGARIA (mln euro)
7 000
5 961
6 000
6 109
ia
Au
st
r
y
It
al
an
y
G
er
m
ve
ni
a
Sl
o
va
ki
a
Sl
o
y
H
un
ga
r
nd
Po
la
Li
t
hu
an
ia
.
ic
ep
ub
l
Cz
ec
h.
r
om
an
ia
R
La
tv
ia
ni
a
Es
to
Bu
lg
ar
ia
0
6 500
5 000
4 000
2 736
3 000
2 000
3 152
1 851
1 000
0
2003
Source: BNB
2004
2005
2006
2007
Preliminary data
2007
expectations
20
BULGARIA LEADS CEE COUNTRIES IN TERMS OF
FDI TO GDP INDICATOR
3.6
TURKEY
SLOVENIA
5.0
3.0
1.7
4.0
SLOVAKIA
7.5
5.3
SERBIA
14.2
7.1
UKRAINE
5.4
6.0
ROMANIA
9.3
4.5
POLAND
5.5
8.1
8.3
LATVIA
HUNGARY
CZECH REP
2.6
6.3
4.7
4.2
21.1
BULGARIA
23.6
2006
2007 F
21
FDI STOCK BY SECTORS, 1998 – 2007,
Total for the period 24 266 Euro mln.
19
17
21
19
4619.8 4679
5
6
1259 1459.1
er
h
t
O
E
6
7
5112.4
Value in EUR m
% of Total
4019.1
1515.6 1602.4
m
er
on
o
t
i
t
c
c
le
wa
u
r
e
d
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22
INVESTMENT PROMOTION LAW
•
Focusing on the following sectors of economic activities:
Industrial Sector
Processing industry;
Power generation from renewable energy resources.
Services sector
High tech activities in the field of computer technologies;
Research and development activities;
Education;
Healthcare.
•
Two classes of investment „А” and „B”
•
Minimum amount of investments in a single project
for class А – 70 mln BGN (~56 mln USD)
for class B – 40 mln BGN (~32 mln USD)
23
INVESTMENT PROMOTION LAW
CLASSIFICATION OF INVESTMENTS
DEPENDING ON THE REGION
In municipalities with unemployment rate of 35% or higher than the national, the minimum required amount is:
 for class A - 35 mln BGN (~28 mln USD)
 for class B - 20 mln BGN (~16 mln USD)
In municipalities with unemployment rate of up to 35% higher than the national, the minimum required amount
is:
 for class А - 45 mln BGN (~ 36 mln USD)
 for class B - 25 mln BGN (~ 20 mln USD)
DEPENDING ON THE ECONOMIC SECTOR
Minimum amount of investments in high tech production - two times lower:

for class А - 35 mln BGN (~28 mln USD)

for class B - 20 mln BGN (~16 mln USD)
The minimum required amount in high tech activities in the services sector is three times lower:

for class А - 24 mln BGN (~19 mln USD)

for class B - 14 mln BGN (~11 mln USD)
24
INVESTMENT PROMOTION LAW
ENCOURAGEMENT MEASURES
1.
Shorter terms of administrative service (for class А or class B)
2.
Individual administrative service (for class А) – the measure is implemented by
the Invest Bulgaria Agency before central authorities of the executive power and in
the rest of the cases by the territorial authorities of the executive power;
3.
Acquisition of property rights or establishment of limited rights to real
estate – private state or municipal property” (for class А or class B);
4.
Financial assistance for construction of public infrastructure for class A and
for accomplishment of two or more certified investment projects in the boundaries of
an industrial zone; implementation of the two classes in certain conditions. The
accent is posed on the industrial;
5.
Financial assistance for training for acquiring professional qualification to
persons 29 years old or younger, including trainees from Bulgarian universities
employed as new recruits in the investment project.
25
US DIRECT IMVESTMENTS IN BULGARIA
Dynamics of the US direct investment in
Bulgaria (USD million)
FDI in Bulgaria ,1992-2007, USD million
4 532
Austria
3 377
Nederland
2007
201
306
2006
103
2005
Greece
2 892
134
2004
2 754
Great Britain
Belgium and Luxembourg
1 685
Germany
1 647
2003
128
57
2002
2001
44
57
2000
Cyprus
1 449
1999
62
64
USA
1 254
1998
Hungary
1 207
1997
1996
Switzerland
36
19
1 040
Source: NSI
•
For the period 1992-2007 the USA ranked 8th among the investors in Bulgaria in
terms of FDI amount – USD 1.254 bln
26
US INVESTMENTS IN BULGARIA
(total USD 1 254 m.)
Major US Investments in Bulgaria







American Standard (production of sanitary faience), USD 239,7 m.
Hilton (hotel), USD 39,7 m.
Craft Foods (chocolate factory), USD 38 m.
MacDonald's, USD (fast food chain)23 m.
News Incorporated (tv channel) USD 22,8 m.
World Trade Company /Gort Securities UK/ (Radisson Hotel), USD 17.7 м.
Westinghouse –modernization of 5 & 6 energy units of NPP “Kozlodui” (completed)
Ongoing projects with US participation in Bulgaria






AES Corporation – construction of a new 670 MW TPP within “Maritza East 1” TPP (for
the period 2006-2009) – the biggest “green” investment of AES in SEE, worth more than
USD 2 bln.
Textron –offset agreement (signed in November 2007) for USD 20,4 m. ”green”
investment in the construction of Low-voltage equipment Factory
Honeywell - modernization of 1,2 and 4 energy units of TPP “Maritza East 2” for
USD16,9 m. (started 2006)
Hewlett Packard- “Global service centre” for its clients in Europe, Africa and Near East.
Microsoft is to open in Bulgaria a free online software support centre, covering SEE
Microsoft, Cisco Systems and Siemens – are to launch soon a centre for innovations
27
INVESTMENT COOPERATION
BETWEEN BULGARIA AND USA
Forthcoming US projects in Bulgaria

AES-Bulgaria plans to build a 120 MW Wind Power Park for USD 250 m.

Tishman International Companies” plans to invest in a Logistics and Business Centre more than
USD 300 m.

Honeywell– plans to open a centre for assembling of industrial automation systems

CISCO – plans to open a fund for investment in IT SMEs in CEE, including Bulgaria
Possibilities for future US investment in Bulgaria

In 2008 will commence a Special Public Procurement Award “Development of Communication
and Information Means” (Offset Project №9) for the modernization of the Bulgarian Armed Forces,
USD 300 m.
- ITT Corporation, Lockheed Martin and General Dynamics are interested to participate

In 2010 the Offset Project № 3 “Acquisition of a new multiple-role fighter” for the modernization of
the Bulgarian Armed Forces is to be started.
- Lockheed Martin and Boeing have presently expressed interest to participate.

Global Environment Fund has included Bulgaria in its long-term plans for investment in renewable
energy sources and water treatment plants in Bulgaria.

Bulgarian-American Investment Fund and its Bulgarian –American Credit Bank provides
funds for investment in Bulgaria (mainly in the field of tourism and SMEs) with a capital USD 70 m.
28
SUFFICIENT ACQUISITION OF THE EU FUNDS IS ANOTHER
IMPORTANT PRIORITY FOR STIMULATING THE ECONOMY
25%
22%
20%
15%
15%
Value EUR m
2003
% of Total
1800
1234
2%
1601
1213
ss
is
ta
nc
e
Ca
pa
ci
ty
Te
ch
ni
ca
lA
Ad
m
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is
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ev
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en
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En
vi
ro
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an
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or
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tit
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180
1%
56
The Ministry of Economy and Energy runs Operational Program “Competitiveness”
with a Budget of EUR 1.2 billion






Priority 1: Economic development based on knowledge and
innovation activities (budget – EUR 246 million or 21%)
Priority 2: Increasing production efficiency and development of
favorable business environment (budget – EUR 593 million or 51%)
Priority 3: Provision of financial resources for business development
(budget – EUR 200 million or 17%)
Priority 4: Strengthening of the Bulgarian economy's position in
international markets (budget – EUR 87 million or 7.5%)
Technical support (budget – EUR 34 million or 3%)
Considerable financial support for SMEs
29
SIGNIFICANT PROJECTS UNDER IMPLEMENTATION
(valued over 8 bln. euro)
•
Construction of a new nuclear capacity at the site of Belene nuclear
power plant –Euro 4 bln;
•
Construction of spare capacity plant at Maritza East 1 thermal
power plant – Euro 1.3 bln;
•
Rehabilitation and installation of flue gas desulphurization plants
in Units 1-4 and increase of the production capacity of Units 5 and
6 at Maritza East 2 thermal power plant – Euro 190 mln.;
•
Rehabilitation and modernization of Maritza East 3 thermal power
plant – Euro 800 mln.;
•
Construction of hydro power plant Tsankov Kamak – Euro 220 mln;
30
ENERGY PROJECTS UNDER STUDY
•
Construction of hydro power complex Nikopol (Bulgaria) – Turnu
Magurele (Romania) – Euro 1.5 bln;
•
Construction of hydro power complex Silistra (Bulgaria) – Kalarash
(Romania) – Euro 1.2 bln;
•
•
Construction of Gorna Arda Cascade and Tundja Dam;
Construction of Maritza East 4 thermal power plant.
31
ELECTRICITY INTERCONNECTION PROJECTS
(Under
implementation)
Construction
of
electricity
interconnection
between
Bulgaria
and
Macedonia:
substation Chervena Mogila
(Bulgaria) – substation Shtip
(Macedonia).
Bor
Vidin
(Planned) - Extension of
-------- interconnections
electricity
towards
Albania
to
Italy
/European Corridor N 8/
(Planned) Construction of
second
electricity
interconnection
between
Bulgaria and Serbia (Vidin –
Bor).
(Planned) Construction of
second
electricity
interconnection
between
Bulgaria
and
Greece:
substation
Maritsa
East
(Galabovo,
Bulgaria)
–
substation Filippi or Nea Santa
(Greece)
32
NABUCCO PROJECT
ROUTE & TECHNICAL DATA
Pipeline diameter: 56” (1422 mm)
Distance: 3 300 km
Investment: 8 billion €
Maximum transport capacity: 31 bcm/y
33
“SOUTH STREAM” PROJECT POSSIBLE ROUTES OF
THE BRANCHES & TECHNICAL DATA
NORTH
HU
RU
SR
BG
IT
SOUTH
GR
Transport capacity: 31 bcm/y
Under discussion - 2 branches “SOUTH” and
“NORTH”
Offshore part RU-BG – 900 km
Max. deep: 2000 m
Singed MoU Eni-Gazprom 23.06.2007
Signed agreements of Russia with:
Bulgaria, Serbia, Hungar, Greece
Total amount of the investment: Euro 12 bln.
34
REGIONAL GAS INFRASTRUCTURE PROJECTS
1. GAS PIPELINE BULGARIAN (BG) GRID – TURKEY – GREECE INTERCONNECTOR
2. REGIONAL LNG TERMINAL (BG & SEE REGION)
3. DUPNITZA – NIS GAS PIPELINE (BG-SR)
5. RUSE – GIURGU GAS INTERCONNECTION (BG-RO)
Giurgu
4
Ruse
Nis
3
Dupnitsa
1
Haskovo
LNG
2
35
OIL TRANSPORT INFRASTRUCTURE PROJECTS
Oil pipeline Bourgas- Alexandroupolis
•Length of the pipeline- 290 km, BG territory - 155 km;
•Pipe diameter – 900 mm (36”);
•Capacity: 0.75 M barrels/day (35 M tons/y);
•2 pump stations;
•Trilateral agreement Bulgaria-Greece-Russia signed
and ratified;
•IPC establishment - February 2008;
•Expected: Start of the construction by the end of
2008.
36
OIL TRANSPORT INFRASTRUCTURE PROJECTS
Oil pipeline Bourgas– Vlore (along the
European Corridor No. 8 route)
•Length of the pipeline – 900 km;
•On Bulgarian territory – 480 km;
•Pipe diameter – 900 mm (36“);
•Capacity: 0.75M barrels/day (35 M tons/y);
•4 pump stations;
•Convention Albania-Bulgaria-Macedonia
signed and ratified.
37
OUTLOOK FOR THE PERIOD 2008 - 2010
INDICATOR
2008
2009
2010
Real growth of GDP
6.2%
6.5%
6.9%
Average annual inflation
(harmonised index of consumer
prices)
6.9%
4.4%
3.7%
Unemployment
6.5%
6.2%
6.1%
-6.9
-7.7
-8.2
-21.1%
-21.0%
-20.0%
7.0
7.6
8.2
Current account, € bn
Current account, % of GDP
FDI, € bn
(average annual rate of 8%)
Source: Agency for Economic Analysis and Forecasting. FDI – prognosis of MEE






It is expected that the dynamic and ascending development of the Bulgarian economy will continues.
The economic growth rate is envisaged to exceed 6% annually.
According to the forecast in the end of the period the average annual inflation rate will drop to 3.7%.
The unemployment rate will remain 7%.
The current account deficit will remain 21% of GDP.
In order to cover the current account deficit FDI should increase annually by 8%
38
GLOBAL COMPANIES ARE GAINING INSIGHT IN
ADVANTAGES OF DOING BUSINESS IN BULGARIA
Examples of those who already have discovered their opportunity in Bulgaria
“Very well educated, talented and committed
workforce, large talent pool, very competitive
cost structure, European culture, good English
skills, short flight times and almost no time
difference from Western Europe…” - Dr. Peter
Kurpic, Senior Vice President NetWeaver
Foundation SAP AG
“…among the reasons why HP had chosen Bulgaria were
the high level of education in terms of technical skills and
languages, good infrastrucutre and investor-friendly
legislation.“ – Tino Canegrati, HP Global Delivery
General Manager
“Political and economic stability, the
qualified labor force and the cost
structure” – Gilles Bernard,
Executive Director of EPIQ
(Belgium)
YOUR
LOGO
HERE
“Over the past several years, we have proven that Bulgaria is a
competitive, productive place to do business with a lot of talented
and well trained people. As we look to expand here in Sofia we
plan to continue hiring the best and the brightest people that
Bulgaria has to offer.” – Eric Dumas, Director of Tumbleweed
Communications Bulgaria
“The combination of existing and proven local expertise,
the excellent academic facilities and the strength of the
Bulgarian economy, made Sofia an ideal choice for
further investment in our global mixed-signal engineering
capabilities.” – Nelly Pergoot, Managing Director, AMI
Semiconductor (USA)
The list of foreign companies in Bulgaria is growing quickly!
Source:
Invest Bulgaria Agency – Bulgaria Investment Guide 2007, Value Scope Bulgaria, http://neveq.com
39
THANK YOU FOR YOUR ATTENTION!
Ministry of Economy and Energy
www.mee.government.bg
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