Transcript Macroeconomic Environment

Βulgaria
* Macroeconomic & Business Environment
* Bilateral Economic & Commercial Relations
* Prospects
Theologia Voulgari
Second Secretary for Economic &
Commercial Affairs
Embassy of Greece in Sofia
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General Information
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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)
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Macroeconomic EnvironmentLatest data
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“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
household expenditures - at the same time government
consumption decreased by 4.4%.
The import of goods was up 3.4% supported by
domestic demand
Exports declined as a result of weaker demand from
Bulgaria’s main trading partners.
Current Account Balance: -0.7 (2011 +1.7)
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Macroeconomic Environment –
Latest data
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Harmonized Index of Consumer Prices: 3.4% (2011-2.4%)
Gross value added increased slightly.
Positive contributions from agriculture, manufacturing, trade,
transportation and accommodation, public administration,
entertainment. Negative from the rest.
The construction sector posted a 12.6% decline
After three years of strong contraction, investment activity
stabilised over 2012 supported mainly by public projects and
some recovery in FDI.
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Macroeconomic Environment Latest data
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Registered unemployment increased further to 11.9%
(2011 -11%)
The average wage in the economy continued to increase;
according to preliminary data by 11.7% and 9.1% in nominal
and real terms respectively.
Labour productivity also kept expanding, up 5.4% in 2012.
This resulted in real unit labour cost decrease of 2% yoy.
Favorable labour productivity developments were determined
primarily by the trade and real estate sectors.
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Macroeconomic Environment –
Latest data
Strong Fiscal position: Improved fiscal deficit from to 2% of
GDP in 2011 to 1% of GDP in 2012
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Expectations for GDP in 2013
IMF: 1.5%
European Commission: 1.4% and 2% for 2014
EBRD: 1.9% for 2013
World Bank: 1.8% (initially 2.5%)
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Business Environment:
Generally positive
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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
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Business Environment
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The business climate indicator rose by 5,7% compared to
January 2012.
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Respondents had positive expectations about demand and
orders in the coming months.
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For the first time since mid-2012 there was an improvement
across all sectors of the economy.
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The assessment of the current and future business situation
was more favourable and optimistic.
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Business 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)
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Business Environment –
Taxation
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Corporate income tax applies at a uniform rate of 10%.
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Individual income tax is 10 % flat tax rate.
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Withholding tax at 5% is deducted from dividends
distributed by Bulgarian resident companies.
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VAT rate is 20%.
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Real estate tax ranges among 0.01 % - 0.45%
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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
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Government support - Sectors
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Manufacturing
Research & development
Education
Healthcare
High-tech services
Warehousing and logistics
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Challenges
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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.
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Greek 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.
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Greek investment in Bulgaria
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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 GreekBulgarian 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
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Bilateral Trade Relations
Million euros
2008
2009
Volume of Trade
2.424
1.817,3
Greek Exports
2010
2011
2029,1
2.395,6
1.251
968,2 1.059,6
1.239,2
Greek Imports
1.173
849,1
969,5
1.156,4
Current Account
Balance
+77,9
+119,0
+90,1
+82,8
Source: ΕΣΥΕ
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PROSPECTS
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Tourism
Food & drink products
Infrastructure Projects and Real Estate Development
Environmental Technologies
Information and Communication Technologies
Automotive
Healthcare/Medical
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Thank you for your attention!
Theologia Voulgari
Office for Economic & Commercial Affairs
Embassy of Greece in Sofia
[email protected]
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