Bulgarian News
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Bulgarian Economy On Road To Recovery.
No Need For IMF Loans.....
The Bulgarian economy looks to be stabilizing after the recent
economic crisis, seemingly better than most of its neighbors. Whilst
other countries like Greece have taken loans from the IMF, Bulgaria has
declined to take a loan for now.
The economy contracted 3.6% on an annual basis during the first quarter
of 2010 from 5.9% in the previous quarter. The GERB government is
looking to a 1% economic growth during 2010 as recovering exports heads
the recovery. This would be a more improved recovery compared to that
seen in other countries in the European Union.
EU finance ministers have decided to set Bulgaria under the excessive
deficit procedure, a program to reduce its budget deficit below the 3%
threshold of GDP required by the Stability and Growth Pact.
Bulgarian consumer price inflation eased to 1.4% in June on an annual
basis from 1.9% a month earlier, so the country doesn't face the risk
of stagflation. Also, the government says that at the end of this year
the unemployment rate will be below the 11.4% forecast.
Bulgaria recorded its first surplus in dealings with the EU, so it is
receiving more cash than contributing to joint budget of the Union.
This indicates that absorption of EU funds is improving and the country
hopes to improve infrastructure and living standards with EU funds.
Bulgarian Property Market 2010.
Below Market Value / Distressed Properties.....
The new year brings fresh optimism regarding the property markets in Bulgaria. Analysts and forecasts show that continued recovery on property sales will been seen from the first quarter of 2010. The previous drop of 30% is expected to be recovered.
The last quarter of 2009 and the first quarter of the new year is expected to see a shift in BMW (below market value) properties and distressed property sales. The economic strains are forcing foreign property owners to accept lower than expected offers for their properties and investments.
Distressed properties are largely those owned by UK citizens and other nationalities largely affected by the credit crisis. Many properties are available for purchase at ridiculously low prices by distressed owners and the starting point of the recovery of the Bulgarian property market will be the steady turn over of distressed sales. If you imagine the UK property markets are stimulated by first time buyers - overseas property need a similar stimulation to kick start a new buying trend, the bulgarian property markets equivelant of "first time buyers" is the distressed property sales.
BMV properties will be the next properties to be sold and will represent the new market valuations for average properties and will provide sellers and buyers with a genuine marker for the value of properties. After a large shift of distressed and BMV sales will we see the new market trends for the next five years and the potential growth.
Despite the doom and gloom of recent months (apx 18 months) we are seeing astute investors buying in bulgaria due to the deals that are on offer. This is the optimism - the start of the recovery - if you are an investor then now is the time !!
Combating Real Estate Irregularities.....
A draft legislation to the notaries public act in Bulgaria has been announced in order to combat fraud and irregularities within the real estate industry.
The amendments are likely to take effect in January 2010 when all deals will require a bank account rather than cash deals. The notary public bank account however could be used if either the seller or buyer does not nominate a bank account.
The new law is expected to be "The deposit Account Act"..
Household Costs Rising.....
The average cost of household monthly expenses is starting to pinch the purses of families in Bulgaria. In August and July, expenses soared by nearly 30 leva to take the total average outlay per family to 744 leva.
Entertainment and education costs recorded the sharpest increase.
Utilities expenses such as electricity, water and other fuel bills, saw an outlay of 115 leva.
Alcohol and cigarette consumption remained fairly steady accounting for about 35 leva of the family expenses.
Food and drinks remains the main expense for Bulgarian families with their total expenses, cutting off 269 leva from their monthly income.
Bulgarian unemployment rises.....
Recent statistics show that the number of people out of work in Bulgaria has risen from 7.88% to 8.03% in September09.
The figure has risen significatly since this time last year, when it was 5.8%. The increase in unemployment is attributed to the global economic crisis, which has seen Bulgaria enter recession.
Bulgarian forecast from IMF.....
The International Monetary Fund (IMF) has suggested that Bulgaria will see a deficit of 0.5% in their budget at the end of 2009.
The IMF have also reacted well to the measures taken by the new GERB government who have so far been seen to be dealing with fiscal deficits and anti-crisis procedures.
The IMF did recommend reviewing procedures and business models to ensure Bulgaria's growth does occur succesfully and bring them out of any financial crisis. The country was also advised to concentrate on their trade industry and controlling salary growth.
EU funds promised.....
Boyko Borisov is confident that the EU funds previously allocated and frozen will soon be made available again. There is concern that currently there is a lack of quality projects in which to direct any funds made available.
Banks to assist farmers.....
Banks in Bulgaria are due to assist farming projects by co-financing projects that receive EU funding. It is expected they will sign a memorandum with the Ministry of Agriculture in October.
1€ to form a bulgarian company.....
Parliament have changed the laws regarding capital required to register a new company. In the past it was necessary to have 2,500€ in a bank account in order to be able to open a company and buy land. Despite making the process easier for foreign buyers to purchase property with land, the move was also designed to stimpulate growth of newlocal business.
Property prices
increase.....
On a radio broadcast Lachezar Iskrov, the chair of the National Real Estate Association said that property prices in bulgaria have not fallen. In fact they have rose slightly by 2 - 3% in August
Showcase Bulgaria predict that the obvious forecast for investors is to expect property to remain stable now for, two or three more years before reaching heights seen before the global economy demise. There is still some way to go before the recent losses are regained. In some areas prices dropped up to 30%.
