Inflation in the two years of Bulgaria’s EU membership from January 1, 2007 spiraled to little over 20%, showed data of the National Statistical Institute.

The rise in prices was offset by a steady wage growth, which exceeded 30% in some sectors as both try to catch up with levels in the older members of the bloc.

However, in the last months the trend started to reverse driven by seasonal factors and by the current global economic and financial crisis, which forced Bulgarians to tighten their belts and so prices started to fall.

Thus the Bulgarian economy registered deflation for a second month in a row, and the annual inflation for 2008 was much slower than for the previous year.

The country’s December consumer price index slipped 0.2%. The recent food and oil price drops decelerated end-year inflation to 7.8% from 12.5% for 2007, under official statistics.

The data ties up with the Government’s forecast for a single-digit inflation made early last year.

Inflationary pressures eased in spite of record highs in the early and summer months of the year, when food and oil prices powered up consumer prices the hardest since 1997.

Most experts project the inflation will continue to slow down through 2009, and the new challenge for the Bulgarian economy will be sustaining growth.

Bulgarian inflation should ease to a single-digit figure this year, but deflation is not out of the way, threatening to sink demand and consumption, said Vladislav Penev, board chairman of asset manager Status Capital.

(Dnevnik)

Indices on the Bulgarian Stock Exchange finished sharply lower on Tuesday after moving cautiously up by midday.

Aleksander Madjirov, portfolio manager at UBB Asset Management, blamed the slump on news that Russian gas still has not reached Ukraine, which should pass on to Bulgaria.

Foreign investors who hoped to cash in on a faster end of the gas conflict chose to sell out lifting turnover to more than BGN 2 million.

However, Ivan Ovcharov, chief broker at Elana Trading, ruled out the possibility of any effect of the gas row on the Bulgarian Stock Exchange. He said the fall was triggered by a pullout of a key foreign investor and by the negative mood on the world’s equity markets.

Synergon Holding, the Bulgarian diversified holding company, traded the highest volume of stocks, of more than 164,000, but nosedived 12.3% to BGN 1.84 apiece.

Toplivo, the Bulgarian distributor of construction materials, slipped to a 5% drop from positive movement last year.

Engineering company Enemona shed 6.6% to BGN 7.78.

SOFIX of the blue chips was down 1.04% to 346.87 points as Dnevnik 20 of the biggest and most liquid companies dropped 1.75% to 51.66 points.

(Dnevnik)

German transport, forwarding and logistics provider EMONS acquired 20% in local MB Logistic, said Minko Vasilevski, manager of the Bulgarian firm.

Financial details have not been revealed yet.

The German company aims to firm up positions on the east European market.

MB Logistic, set up in early 2008, has registered a turnover of BGN 400,000 since last July, when it started operations.

The company hopes to swing to profit by the end of May, according to Vasilevski. Company performance worsened under the global financial crisis, which caused the bulk of its customers, most of them Bulgarian companies, to cut exports by 50-70%, said Vasilevski.

Another problem the sector is facing is poor infrastructure.

Yet there is a silver lining to the crisis – falling demand for logistic space is emptying many warehouses, making room for more goods to be stored.

In addition, more companies are turning to forwarding firms as they seek to optimise logistic processes.

EMONS was founded more than 80 years ago. It has an annual turnover of EUR 300 million and a staff of 1,800. One of its core markets is Eastern Europe. The company has subsidiaries in Russia, Ukraine, Litva and Romania.

(Dnevnik)

The deepening labour deficit and the high inflation rate pushed wages to a double growth in the first two years of Bulgaria’s EU membership, under data of HR agencies ConsulTeam, AIMS Human Capital, Monday and Hay Group.

Salaries in Bulgaria went up by 10 to 16% in 2007 and by an average of 15% in 2008, according to the agencies.

Other factors for the rapid pay rise are employees’ work results and company performance.

While they say galloping wages are a major catalyst for inflation, analysts and employers agree there will be only modest rises this year.

The IT and software industry saw the biggest wage growth in 2008 of 20% year-on-year.

Furthermore, the sector was one of the leading in terms of employee perks with ninety-seven percent of the companies giving bonuses and more than 30% offering commissions, according to a research of ConsulTeam.

Salaries for some IT positions jumped almost 30% last year, under data of AIMS Human Capital.

Hay Group has estimated that Bulgaria’s average wage growth is some four times bigger than Europe’s average.

Still, the country trails all EU members but Latvia in terms of bottom pay, according to statistics of Eurostat, the EU's statistical office.

(Dnevnik)

Bulgaria’s automobile market expanded for a fifth successive year but prospects are bleak, revealed data by the importers’ association.

The local car dealers sold 57,927 new cars, trucks, buses and motorcycles from January to December compared to 55,366 for the same period of last year.

The 4.6% year-on-year growth was dwarfed by the 22.15% jump a year ago.

The statistics does not include data by Industrial Commerce, the local Hyundai dealer.

Bulgarians bought 4,211 new motor vehicles in December, which tends to be one of the busiest months. The sharp drop of over 76% on the year is due to the ongoing global financial turmoil, which postponed purchases of big-ticket items such as cars, and the more adverse bank loans and leasing requirements.

Market representatives are fretting over the steep fall in car sales in tight economic conditions and the hard task of regaining the lost ground when things get better.

Therefore most dealers hope to maintain last year’s sales in 2009 rather than outperform.

Last year’s statistics show that 15 companies reported worse car sales than for 2007.

Opel’s eight local suppliers finished top of the market selling 5,462 vehicles, which earned them 10.15% of the market. They sold 1,000 units to the interior ministry.

The runner-up was 2007’s number one, Toyota Balkans, which signed 5,082 contracts capturing 9.44% of the market.

The bronze went to Porsche BG with Volkswagen, which sold 4,709 vehicles.

(Dnevnik)

Communications chain Publicis MARC Group owner Nikolai Nedelchev said he will sell his majority stake in the company to global partner, Publicis Worldwide.

The press conference held last night was attended by Publicis Worldwide executive director Richard Pinder, who said the strengthening ties between the two firms are part of Publicis’ long-term interests in Bulgaria and the region.

No deal’s price tag was not disclosed.

Publicis MARC Group is the successor of PR agency M.A.R.C. formed in 1995 by Nikolai Nedelchev. In 2002 the agency became a franchisee of Publicis Worldwide.

MARC Group represents on the market advertising agencies Publicis, Saatchi&Saatchi, media agencies Zenith Optimedia and ZedDigital, PR agencies network Publicis Consultants and corporate design agency Carre Noir.

Publicis MARC Group is Bulgaria’s fourth largest advertising firm with revenue of BGN 34.7 million for 2007.

Publicis Worldwide registered revenue of EUR 4.67 billion and a net profit of EUR 452 million for the same period.

(Dnevnik)