LM Legal Services Blog

Although that according to the official statistics the construction of buildings has decreased by 1,4% on an annual basis, the index of the construction has increased by 2.1% in March 2012 in comparison with March 2011. The production of the construction industry in March 2012 has increased by 7.1% annually. This is mainly due to the increase of the volume of civil and engineering construction.
In comparison with February 2012 the retail index in March 2012 has increased by 3.9%. The highest increase was in the sales of home appliances and hi-fi, furniture and home ware. However in comparison with February, the online and phone sales have decreased, as well as the sales of medicines and perfumes.
The industrial production in March 2012 has increased by 1% in comparison with February 2012. The index of the industrial production has decreased on an annual basis by 3.2%. The production and the supply of electricity, heating and gas have decreased.

Although that according to the estate agencies, the number of property sales in Bulgaria has increased by 22% in 2011, it must be underlined that this includes the sale of Mall Sofia for 100 million Euros which in fact was about 55% of the investments in the last year. In the last quarter of 2011 the investments in property have reached 186 million Euros which was the highest level since 2008. The Bulgarian market has shown vague signs of recovery but in practice the property prices in 2012 remained the same as last year. The British and the Irish buyers have almost disappeared from the Bulgarian market and the hopes that Russian buyers will enter the market in their place proved to be ungrounded. The property sector is not the major driving force of the Bulgarian economic growth and thus the direct foreign investments are not plenty in it at the moment. This is why the expectations are that the property prices will further decrease by 10-20%.

The Bulgarian Economy will grow of only 1.5% in 2011, according to analysts. Earlier forecasts predicted a growth of 2.6%. However, the expectations are for a decrease of the export and a negative impact on the labour market.
The slowing down of the growth of Bulgaria’s GDP is due to the negative perspectives for the Euro zone economy and the expected sharp drop of the investment in Bulgaria in the third quarter of 2011.
The analysts expect additional decrease of the balance of the corporate sector. The export which has been the stabilizing factor of the Bulgarian economy is expected to shrink and to put under a risk the already stabilizing labour market.
It is expected that Bulgaria will avoid the second recession because the balance of the public sector remains strong, while the export demand is steadily decreasing, although it is far from the sharp drop experienced in the beginning of 2009. The growth of the Bulgarian economy is expected to return to normal levels in two-three years time.

The Bulgarian National Statistics Institute has announced that from July to September 2011 the Bulgarian GDP has increased BY 0.3% in comparison with the previous quarter of 2011. In comparison with the same period of 2010, the growth is by 1.6%. Nevertheless, the Bulgarian economy is slowing down. In the first quarter of 2011 the growth of the GDP was 3.3%, while in the second it was 2%. According to the analysts in the beginning of 2012 the growth will slow down even more it will not enter into a recession.
In the last year the productivity of the Bulgarian economy was one of the best in Europe – exceeding 7%. Partially this was due to the lost of jobs, partially to increased production. The National Statistics Institute has announced that in the first quarter of this year the Bulgarians have increased their productivity by 5.9% on an annual basis. The highest increase was in industry, while the worst was in agriculture.

The Bulgarian parliament passed the Bugdet 2012. According to the budget the growth of the Bulgarian economy in 2012 will be 2.9%. However, according to the National Statistics Institute the Bulgarian econcomy has slowed down in the last quarter of 2012. The Bulgarian GDP has not changed in the period July – September 2011 and has increased by 1.3% on an annual bassis. Usually the summer months are considered very good for the Bulgarian economy because of the expected income from tourism. The expectations were that slump of the European markets will affect Bulgarian economy in the autumn, however this has happened much earlier. The Bulgarian government is prepared to revise Budget 2012 in case that the situation gets worse.