The snowballing turmoil that has frozen the global financial markets is breathing ice into Bulgaria’s winter resorts as well, tourist sector representatives said.

It was only last year that Bulgaria’s top mountain resorts of Bansko and Borovets, near Sofia, and Pamporovo, in the south, enjoyed double-digit growths in tourist numbers. But the crisis dampened new hopes and had the sector bracing up for lower levels. Hotels and apartment complexes mushrooming in the recent years are in for a cold winter.

The major British tourist operators have suspended charter flights to Plovdiv, which is where the bulk of Pamporovo holidaymakers land. The crisis and the airport’s poor infrastructure have pushed out Balkan Holidays, which brings some half of the British tourists.

The lack of snow is also spelling trouble for Pamporovo after the tap was turned last year on the dam that fed snow guns with water and they ran on drinking water instead last year.

Tour operators say some 35,000 British skiers visited Bulgaria last year but levels will drop in 2008 as the UK is grappling with a severe economic meltdown.

The crisis did not spare Russia either, Bulgaria’s second largest winter tourism market, according to tour agents. Russians opt for Bansko and Borovets while Pomporovo is their third best. Local hoteliers say most of them have packed up and left by mid-January.

While some tour operators say there are no markets to make up for this year’s outflow of Brits and Russians, others are betting on Serbians, Macedonians and Greeks. Still they admit the visa requirement is driving Serbians and Macedonians away.

(Dnevnik)

The central bank should revise its policy of maintaining excessive reserves to get cash flowing back to banks, Gancho Ganchev, chairman of the economics and international relations institute, told the forum The Global Financial Crisis: Threats for Bulgaria.

The central bank should change the reserve requirement to offset a further credit squeeze, Ganchev said adding a similar step taken a few years ago unlocked the local credit market.

The Bulgarian banking system is stable but the credit crunch is facing the real economy with tough trouble, said Center for Economic Development co-chairman Aleksandar Bojkov.

“The major problem we are looking at is the slumping investments. It is not small and medium companies but big corporations that will feel the pinch of the tight credit because they are more exposed to the global markets,” Bojkov explained.

“The Bulgarian financial system is not immune to concussions. Banks and businesses may experience a severe shortage of cash putting the brakes on the economy,” the participants in the forum said in a joint statement.

(Dnevnik)

Sofia municipality will hold talks on direct gas supplies for the city’s heating utility to cut costs, said mayor Boiko Borisov.

Toplofikatsia Sofia is now supplied by gas company Bulgargaz, which buys from Gazprom.

Asked whether Gazprom would be approached for talks, Borisov said that “it’s not just them that sell gas. Gaz de France also does”.

The municipality will be seeking a new supplier after the utility piled up some BGN 50 million in current debts and a further BGN 120 million in long-term liabilities to Bulgargaz.

Sofia cannot skirt Bulgargaz, which owns the distribution grid, but may rent pipes if there are any quotas left, said municipal secretary Rosen Zhelyaskov.

The municipality will pick advisor on Toplofikatsia’s sell-off by the end of the year but not before it has steadied the company to avoid amassing BGN 30 million in debts monthly, Zhelyaskov said.

The municipality will seek private investors to launch cogeneration projects, sell electricity and share profits with the utility.

(Dnevnik)

US coffeehouse chain Starbucks will open its debut Bulgarian store on Sofia’s Gurko boulevard next month.

This is the first official statement issued by Marinopoulos Coffee Company Bulgaria, a joint venture of Starbucks Coffee Company and Marinopoulos, the chain’s partner for Greece, Cyprus, Switzerland, Austria and Romania.

Starbuck’s long-awaited entrance on the market will peak the competition that has sharpened in the recent years. Almost all of the ten players represent international chains. Local Onda, the first specialty coffee chain on the market, boasts the biggest number of stores.

Coffeeheaven and Costa Coffee are the other major players on the market shared also by Coffee Republic, McCafe, Flocafe and Coffee House. Dnevnik has learnt another one is preparing to muscle in.

Starbucks is the world’s biggest coffee chain running 13,000 stores. It unveiled 2,500 stores last year and planned to open as many in 2008.

(Dnevnik)

The Bulgarian Stock Exchange ended a second positive session as global stocks started to regain confidence.

The main indices on the BSE rose between 2 and 3%, and only BGREIT, which gauges the performance of real estate investment trusts, could not break away from contraction territory.

“The concerted efforts of the central banks around the world are bearing fruit and confidence is coming back to stock markets,” said Nikolai Kichukov, broker with Elana Trading.

Interbank lending rates dropped further helping melt the ice on the interbank market.

BSE brokers, however, sounded the alarm there may be new trouble ahead with stable buyers still shunning the market.

Tuesday’s trade turnover almost touched BGN 7 million, but some two-thirds of it came from special purpose vehicle Capital Management.

Kichukov said the BSE indices will continue to dance in step with foreign news because little happens at home.

A recent poll of Dnevnik daily showed 43 percent of Bulgarians still fear new failures of US and European corporations. More than half said 2009 might see stagnation or new sharp declines.

(Dnevnik)

Bulgaria is one of the most vulnerable countries to capital inflows in the region, showed a survey of UniCredit Group presented at the Euromoney conference on Central and Eastern Europe held in Thessaloniki.

Also in the group are Kazakhstan, Latvia and Estonia.

The dependence on capital inflows is the major challenge the CEE countries are facing, said Debora Revoltella, the CEE Chief Economist of UniCredit.

The global financial crisis is having a negative impact on the price and the access to foreign funding and will hurt the three sectors that have been driving the economy in the recent years – real estate, construction and financial brokerage services.

The CEE countries should respond to the new environment to fulfill the soft landing scenario, the economists said.

Investors can cushion the effect of the crisis if they play safe, according to Revoltella.

Bulgaria’s foreign investments should make some 61.5% of GDP to help the country weather the approaching storm, said Piritta Sorsa, analyst with the Organisation for Economic Co-operation and Development.

Crises give way to rapid and massive growth, and the first signs of improvement should be seen in second-half 2009, according to the analyst.

The indebtedness of the population is another major test for the stability of Southeastern Europe, where loans outstrip deposits by some EUR 50 billion. The trend is expected to spread over the wider region but the banking sector still has not unfolded its full potential.

(Dnevnik)