The global economic downturn may crumble Bulgaria’s GDP grow to 3%, according to the blackest scenario of the finance ministry in the 2009 draft budget.

The base inflation is forecast quickening by 3.5% or 5% as the economy is grappling with growing administrative costs and rising gas prices, said deputy finance minister Lyubomir Dotsov.

The inflation rate will rise by 1-1.4 points by the end of the year on the back of the massive gas hike.

The growth of the economy hinges on the development of the global financial markets plus the price of goods and raw materials, but is also in the hands of politicians who have to decide which way the budget surplus will go – to infrastructure projects or to higher wages and pensions, Datsov said.

The final version of the draft budget should be tabled with Parliament by the end of the month.

Economic growth will be in the range of 5%, Prof. Garabed Minasyan told Dnevnik daily pointing out that higher budget costs could stand in the way of sufficient surplus needed to stave off further economic instability.

Georgi Angelov, economist with Open Society Institute, said the Cabinet should revise its surplus plans to steer the economy away from the serious trouble brewing down the road.

(Dnevnik)

New-built business properties have increased by a small number in first-half 2008 but a flurry of others should enter the market over the next two years, showed a survey of international companies Colliers and Raiffeisen Real Estate.

The market of retail and business properties remains stable and will see a strong growth in the medium and the long term, said Atanas Garov, executive director of the local Colliers office.

Raiffeisen Real Estate estimated that foreign direct investments in the market have sharply declined by 36.5% to EUR 652 million in the six months through June.

The office space expanded by 7% and will double in the coming two years, said Colliers.

Raiffeisen Real Estate said the volume of vacant offices has fallen to less than 5 percent with supply set to outdo demand.

The proliferation of shopping malls has boosted the retail space market by 31%. The segment will see an eightfold growth in the next two years resulting in smaller rent prices, Raiffeisen Real Estate said.

The logistics and industrial segment laboured its way under administrative hurdles and the global financial crisis, said Colliers. The lettable area in Sofia rose by 14% to 207,000 sq m.

(Dnevnik)

Bulgaria’s general insurance steamed ahead in the seven months through July posting a 23% year-on-year increase of premium incomes to BGN 847.7 million, shows data of the Financial Supervision Commission.

Motor insurance generated the bulk of the premiums of some 70% with comprehensive covers fetching more than BGN 395 million.

Property policies gained new momentum collecting over BGN 142 million in premiums.

Premiums from railroad vehicles insurance doubled, and marine insurance premiums added more than a third.

The life insurance segment posted a 28% year-on-year increase to over BGN 303 million in end-July from the same period of 2007.

Life and annuity policies continued to hold a handsome portion of the market, but accident insurance also gained a foothold.

Unit-linked insurance gathered premiums in excess of BGN 12 million grabbing nearly 8% of the market in the review period.

(Dnevnik)

The shareholders of UniCredit, Italy’s biggest bank, decided at an extraordinary meeting to pump EUR 6.6 billion into the lender’s capital.

Instead of paying dividend cash, the bank will divvy up EUR 3.6 billion in new stocks among shareholders and sell another EUR 3.0 billion worth of CASHES with a coupon of the three-month Euribor plus 450 basis points at a price of EUR 3.083, the stocks’ closing price on the Italian Stock Exchange on October 3, 2008.

The bank has estimated its Core Tier 1 ratio Basel II will grow to 6.7% from 5.7% in end-June.

The last three weeks plagued the whole financial sector resulting in unprecedented volatility and pressure, including on UniCredit stocks. Therefore the Core Tier 1 ratio of 6.7% is based on the expected EUR 5.2 billion profit, or some EUR 0.39 earnings per share before the capital increase.

The gap versus the previously announced target of EUR 0.52 EPS is attributable both to deteriorated financial market conditions, which have affected the performance of market-related activities and to the delay in UniCredit assets disposal plan, the lender said in a statement.

Italian Prime Minister Silvio Berlusconi told Bloomberg that the capital hike decision is no reason for alarm but a guarantee that the bank is safe and sound.

Trading in UniCredit shares was halted for an hour to allow chief executive Alessandro Profumo to explain the board’s decision to investors. He reiterated that this is not a surprise move but was prompted by the ailing global markets and that UniCredit continues to be a very strong bank.

(Dnevnik)

The telecoms regulator CRC granted Bulgaria’s biggest cellular operator, Mobiltel, another dialing code, 98, and two blocks of a million phone numbers each.

The operator was irked by the ten-month delay of the regulator’s decision dating from September 19.

Early last year the watchdog threw cold water on Mobiltel’s hopes for the vacant code it requested saying it had only absorbed 60 percent of the allocated resource.

The company’s regulations head Nikolai Kichev said back than the operator had five million subscribers and had issued a million SIM cards, used another million for internal systems synchronisation and yet more to provide data services.

Mobiltel challenged the regulator’s refusal in court and requested resources for a second time in end-July on the grounds that it had ran out of numbers.

The operator said it was mulling over launching new services with the new codes but declined to elaborate further.

The resource will not be used for new SIM cards because the old capacity has not been depleted, the firm said.

The CRC will stash away two million numbers for Mobiltel’s rivals, Globul and Vivatel, although they have not requested resources.

(Dnevnik)

The construction of Mall Bulgaria bog-box shopping centre will gobble up twice as much as initially planned two years ago, it emerged after Italian lender UniCredit said it will bankroll the project by EUR 220 million.

The cost of the office and shopping mall scheme was seen at EUR 120 million in 2006.

The retail complex is a joint project of local LSProperty and international property management group Salamanca Capital.

Mall Bulgaria is managed by Eli Egosi, who was part of the team that saw though the Mall of Sofia project.

The development will have a build area of 140,000 sq m, including 33,000 sq m of leasable retail space and 25,000 sq m of office space.

The mall, which will accommodate 140 shops, will be anchored by the outlets of French retailer Carrefour, local electronics retailer Technomarket and the Arena cinema chain.

Twenty to thirty mall projects are drafted to mushroom around Sofia but only a handful of them have secured funding. Market representatives say many of them will be abandoned with the global economic plague starving banks for cash and making them more stringent.

(Dnevnik)