Salaries in Bulgaria have outpaced labour productivity by a double margin over the past five years, showed a survey of the Bulgarian Industrial Association.

Pay rise in extraction of minerals and the hospitality industries outran productivity at work by 20%, said BAI chairman Bozhidar Danev.

Under data of the National Statistical Institute, though, the gross annual salary in Bulgaria rose to from BGN 3,647 in 2002 to BGN 5,174 in 2007 as labour productivity increased by 50%.

One worker produced BGN 15,000 worth of output in 2007 compared to BGN 10,000 in 2007, under NSI estimates.

Unjustified pay rises pose a great risk before the economy with growing consumption pumping up inflation and widening the current account gap, Danev said.

Wages in Bulgaria have grown 40% over the past three years, which is four times faster than in the EU, under BIA statistics.

The EU worker makes an average of eightfold bigger contribution to the GDP than their Bulgarian peer.

The steady trend towards wage growth outrunning productivity will hamper economic growth and spell big trouble with the worst crisis in decades tearing through the world, Danev said.

(Dnevnik)

The energy regulator said it has slapped a BGN 40,000 fine on Rila Gas for shelving investment plans and a failure to build a distribution grid.

A tie-in between Italian companies Acegas and Costruzioni Dondi was assigned two years ago a contract to distribute gas in western Bulgaria.

The company has hurt more than 100,000 prospective consumers in the towns of Blagoevgrad, Sandanski and Vratsa willing to use natural gas instead of electricity, wood and coal.

There has also been interest from industrial consumers to switch to natural gas.

A regulatory check found out that Rila Gas has invested BGN 1.6 million out of the total BGN 11 million it pledged to spend last year, the watchdog said in a statement.

In addition, the distributor laid only 2.4 kilometres of pipes out of the promised 155 km.

The company has neither complied with its licence, nor announced general terms and conditions for gas supply nor opened customer service centres.

If it continued to shirk its duties, Rila Gas may be stripped of its permit, regulator chairman Konstantin Shushulov said last week.

The Italian consortium was picked over Austrian EVN and Black Sea Technology Company, which is licenced for Dobrudja and Pleven regions.

The winner vowed to invest BGN 109 million during the first ten years to lure 100,000 household consumers in Blagoevgrad and 293 industrial customers in the region.

Household gasification was supposed to kick off in 2010.

(Dnevnik)

New home rent contracts have surged by 12% in October 2008 from the same period last year as the global economic crisis cooled off the property market and left it at a crossroads, showed data of local realtor Address.

Prospective homebuyers are curtailing plans and renting as banks get more stringent, finances thin and property prices are rumoured to be headed for a fall.

As rent volumes increased, prices picked up a sluggish up to 15%, almost twice slower than previous periods, according to Address.

Small homes are growing costlier as the prices of big flats are falling, said Tanya Galcheva, owner of real estate agency Imoti Doverie.

Demand for two-room flats has surged 14% over the ten months compared to the year-ago period making it the most popular type of home.

The single-room market dropped some 6% because prices were almost the same.

Interest in three-room apartments has increased by nearly 4% as supply gained just above 3%.

The trend is expected to keep up on the back of larger families and companies relocating offices to combat slowing growth.

Home rent demand will continue to grow as economic outlooks dim, Address forecast.

(Dnevnik)

Bulgarian banks have further increased the interest rates and shortened the terms of their deposits.

A 9% return is now available with six- and even five-month deposits as it took 24 or 36 months to reach two months ago.

UBB launched a 9% annual rate on its five-month local-currency deposit in a promotion running until December 31.

EIBank' new six-month Si Major deposit comes with a 9.5% growing interest rate.

FIB’s six-month Serious Deposit offers a 9% return.

Raiffeisenbank Bulgaria extended until December 31 its term deposit promotion and raised rates on one-year and six-month lev- and euro-denominated deposits.

However, the euro is depositors’ darling having attracted 48% of all savings by end-September 2008, up from 43% from a year ago, under central bank data.

Banks are also launching juicy lotteries with as many as three top-five lenders unveiling prize promotions in a single day.

UniCredit Bulbank’s Christmas lottery will hand out 100 prizes including six trips to Barcelona to Visa and MasterCard holders.

Raiffeisenbank customers who open deposits of more than three months and no less than BGN 1,000 by the end of December can win one of 60 prizes of BGN 1,000.

Postbank and Western Union will hand out 10,000 prizes for money transfers made from November 25 till Christmas.

(Dnevnik)

The Bulgarian Stock Exchange took a breath of fresh air on the first day of the week as all indices closed in the positive and SOFIX of the blue chips finished up 3% at 344.49.

Dnevnik 20 of the biggest and most liquid companies rallied even higher closing up 3.86% at 54.41 points.

Holding Patishta lifted both indices jumping a hefty over 16% on the day it climbed to the B segment of the official market.

The other road builder, Trade Group Hold, took its cue from its peer to surge to BGN 3 but Moststroy inched up 0.3%.

BGREIT of the property funds and BGTR30 of the companies with the highest market capitalisation and liquidity gained 2.67% and 1.88%, respectively.

Turnover was in excess of BGN 38 million but much of it again came from fuel retailer Petrol, which sold nearly BGN 22 million shares to end trading at BGN 11, up 4.76%.

Synergon Holding and the Bulgarian American Credit Bank bucked the trend with the holding company closing 10.42% lower. The bank dove to a historic low of BGN 10, down over 17% on the day having shrunk 54% in the past month alone.

Industrial conglomerate Chimimport bounced back 8.44% to over BGN 2.

(Dnevnik)

The Sofia heating utility may enter the newly-founded Bulgarian Energy Holding after the ministry was granted a 58% municipal share in the ailing company, deputy minister Galina Tosheva told Dnevnik.

The ministry and Deloitte Bulgaria, which advised the creation of the holding structure merging major power generation assets, are weighing different rescue options including a capital boost at the holding company to lend cash to Bulgargaz, Tosheva said.

Under the scheme, the holding company will buy into Toplofikatsia Sofia against paying off its debts to the gas company.

The Government is due to vote on a BGN 80 million capital hike next week.

The money will be sourced from the state budget. Tosheva said this did not violate EU law as confirmed the ministry’s legal experts.

Another option on the table is giving Bulgargaz a loan to guarantee supplies from Russian major Gazprom.

Consumers owe the struggling utility more than BGN 300 million.

(Dnevnik)