The Bulgarian economy has plunged deeper into recession in the third quarter although industrial production perked up in September.

Five economists polled by Dnevnik predicted GDP will shrink by a median 5.5% year-on-year between July and September.

Research outfit Center for Economic Development (CED) already forecast the economy will contract by a formidable 6% in the three months through September.

Provisional official figures are scheduled to be released by the National Statistical Office (NSO) on Monday.

The Bulgarian economy declined by 4.9% in the second quarter, extending a 3.5% slide in the first quarter, the first consecutive months of negative growth in 12 years.

The recession forced households to snap up their purses, prompting prices to come down and fuel deflation. The latest numbers published yesterday showed the consumer price index dropped 0.3% on an annual basis, the first year-on-year deflation in ten years.

“I think we’re headed for a worse recession, mostly thanks to the service sector fall and dampened domestic demand,” said Petko Valkov, executive director of asset manager BenchMark Asset Management.

Analysts highlighted the sluggish industry, construction and a decrease in some public procurements as the other major factors that will drag down the economy. The tight credit that froze companies’ investments and hammered consumption will pile up more pressure.

“Public procurements were still around in April-June but they will be gone in the next three months, stoking a steeper slide in GDP for the third quarter,” predicted Tsvetoslav Tsachev, analyses head at investment brokerage Elana Trading.

On a brighter note, Bulgaria’s industrial sector seems to be strengthening as the index rose 2.7% month-on-month in September despite a 19.3% decline for the year.

Global rating agency Fitch said in its latest forecast that the Bulgarian economy is in for a 5.5% drop in 2009 but will rebound by 5% in 2010 and 3.5% in 2011.

Bulgarian finance minister Simeon Djankov expects a 6.3% deterioration for 2009 and a slighter, 2% drop for 2010.

The Bulgarian National Bank (BNB) is more upbeat, saying the economy is poised to contract by 4.2% this year.

(Dnevnik)

For a second straight day this week, the Bulgarian Stock exchange (BSE) went positive but the party was marred by a tiny turnover of BGN 650,000, a sign that it cannot strike a cord with investors.

The main indices, SOFIX of the blue chips and Dnevnik 20 –f the biggest and most liquid stocks, moved up only a fraction but hit their highest for the month so far. BGREIT, which tracks the property funds, turned in the best performance, vaulting more than 2%.

Banks ranked among Thursday’s standouts, with First Investment Bank (FIBank) and Central Cooperative Bank (CCB) adding more than 3% and 2%, respectively. On the downside, Corporate Commercial Bank (Corpbank) and Bulgarian American Credit bank (BACB) weighed on the market.

Brokers said the high spirits were due to the positive session on global markets but warned that investor activity remains weak. They expect optimism will hold through the end of the week but thin volumes will persist.

There is no cause for optimism on the macroeconomic front as the Bulgarian economy dug itself deeper into the downturn in the third quarter of the year despite a slight rise in industrial output in September.

Meanwhile, Morgan Stanley predicted that shares on the world’s developing markets will rebound by 25% by the end of 2010, on the back of surging profits and investors on developed markets building up more resources.

(Dnevnik)

For the first time in ten years, consumer prices in Bulgaria fell on an annual basis.

The 0.3% drop in the prices of goods and services in October compared with the same month of 2009 could be good news for shoppers but reveals the bad shape of an economy where flagging consumption is forcing retailers and producers to take the axe on prices.

Experts approached by Dnevnik pinned the bulk of the blame for the deflation on the raging economic storm that caused households to tighten their belts.

Recession has hit demand, UniCredit Bulbank chief economist Kristofor Pavlov told Bloomberg.

Economists are warning prices could take a new slide in the coming months against the backdrop of rocketing unemployment and a more drastic decline in consumption.

The Bulgarian government expects a marginal inflation of 1.8% for 2009 and 2.2% for 2010. The International Monetary Fund (IMF) projects 1.5% and 1.7%, respectively. Only UniCredit Bulbank has forecast deflation of 2.5% for 2009.

October’s deflation comes as production prices are extending a yearly fall, stoking fears of a deflationary spiral. On the month, however, the Bulgarian economy seems to be pulling itself out of deflation as prices ticked up a precarious 0.1% in October compared with September. This was attributed to a spike in fuels and some services as food products, which account for one-third of household consumption, tumbled for a fifth consecutive month.

(Dnevnik)

Bulgaria’s thermal power plants will see a reduction in carbon quotas by around one million for the period 2008-2012 from the preliminary allocations made in October, deputy environment minister Evdokia Maneva said.

The move comes after it appeared several power stations have exceeded the levels outlined in their integrated pollution prevention and control permits in 2007 and 2008, the two years on which the quotas for the five-year period were based.

Of the 140 companies that will be able to trade carbon quotas within the EU, coal-fired power plant Maritsa East 2 scooped up the lion’s share of the quotas with 45.5 million, which represents more than one-fifth of the total allocation for the period of approximately 212 million, or 42.3 million a year. Under the new distribution, the company will receive a smaller amount, having burned around two million tonnes more coal in its base year, Maneva explained.

The quotas that will be stripped off violators will be divvied up between other companies. The plan should be completed this week before it heads for vote at the Council of Ministers. Once it gets the ministers’ green light, the plan will be sent for approval in Brussels. If the European Commission gives it the thumbs-up by the end of the year, Bulgarian companies will be able to trade in carbon quotas as soon as January.

(Dnevnik)

US fast-food chain McDonald’s strode atop of the 2009 list of Best Employers in Bulgaria among large-scale companies, while drug maker AstraZeneca scooped up the gold for small and medium-sized companies for a second year in a row.

The nationwide survey, carried out for a fourth consecutive year by human resources specialists Hewitt Associates and their Bulgarian partner Monday Insight, aims to study the working conditions at companies with more than 50 full-time employees that have operated on the market for at least two years. This year’s poll was carried out among 13,176 employees as well as 353 top executives of 91 businesses.

AstraZeneca also picked up the prize of Sodexo Bulgaria and Hewitt for best social practices.

The award for biggest employer in success zone went to cell phone operator Mobiltel.

Monday Insight managing partner Svetla Simidchieva said that as more and more large-scale employers are joining the survey, a separate ranking for firms with over 1,000 people on the payroll will be set up next year.

(Dnevnik)