[size=75:2sfmxvib]Sofia echo 8 January 2010

Now for 2010

The outlook for the New Year in Bulgaria is dominated by expectations of continuing recession and job losses, with forecasts for sectors such as tourism, transport and real estate ranging from bleak to moderately optimistic at best.

Economic growth in Bulgaria in 2010 will be no more than two per cent, media reports quoted World Bank Eastern and Central Europe Ted Ahlers as saying.
The Bulgarian Industrial Association said that its members were downbeat, with many planning to scale back investment plans and expecting the economic crisis to hit its worst in the months up to March 2010.

A Sova Harris poll found that close to 70 per cent of employees in Bulgaria’s private sector and 52 per cent in the public sector were worried about losing their jobs.

The Confederation of Independent Trade Unions in Bulgaria said that it expected about 250 000 people in Bulgaria would lose their jobs this year. Construction and tourism, two of the key sectors in Bulgaria, were bracing for tough times, daily Dnevnik said.

"
The forecast is bleak – no building, no volumes, no orders,"
Bulgarian Construction Chamber executive director Ivan Boikov said.

Financial analyst Krassimir Angarski said that it would take at least a year, during which the crisis would worsen, before there was a chance of economic recovery. The big hopes are pinned on public procurements, but infrastructure projects will not be enough to plug the gap of dormant private sector investment, Dnevnik said.

The Confederation of Employers and Industrials in Bulgaria foresees recovery in agriculture and renewable energy. There was some, rare, optimism as well from financier Andrei Proumov, who said that 2010 would – in contrast to official expectations – see growth.

He based his optimism on trends in world financial markets and on a rise in Bulgarian stock exchange indices, meaning that investors mainly expected to see economic recovery in 2010 in spite of the dead hand of the crisis. Bulgaria’s banking sector is much more upbeat than other sectors.

"
I expect lending will pick up by seven to eight per cent in 2010,"
United Bulgarian Bank executive director Stiliyan Vatev said. Asen Yagodin, the head of Postbank, said: "
Towards the middle of the year, lending rates will start to be positively impacted by the measures we expect the government will implement. Any further increases in the cost of deposits are already short of economic logic, which will hold or cut loan rates"
.

But Bulgaria’s transport companies painted a grim picture about 2010, bracing for a further decrease in cargo after the 40 to 60 per cent decrease in 2009. Biomet executive director Vanyo Alexiev told Dnevnik that January to March would be the worst period, while National Association of Bulgarian Carriers deputy chairperson Krassimir Lalov said, "
we are facing the worst year in history"
.

Tourism sector forecasts were for a difficult first six months. Irina Naidenova, head of the supervisory board of the Association of Bulgarian Tour Operators and Travel Agents, said that in the first half of 2010 many companies in the tourism industry would seek to cut costs by restructuring their businesses.

Dnevnik quoted Ventsislav Tanchev of Altours as saying: "
I don’t think there are very encouraging signs about 2010…if last year people felt threatened by the crisis, now they’re in the eye of the storm"
.

Bulgaria’s real estate values are likely to drop by another 10 per cent from current levels because of the weak influx of foreign capital and the delay of bank credit in Bulgaria, think tank Industry Watch said.

"
Readily available cash on the Bulgarian market continues to shrink and while this continues, there will be little opportunity for flexibility on the market,"
Luchezar Bogdanov, managing partner in Industry Watch, said.

However, a bizarrely optimistic note was struck in a report by mass-circulation daily 24 Chassa, which said that the exemption from excise duty on high-performance cars from January 1 was expected to see sales "
soar by 30 per cent"
.