Sat, Feb 11 2012

Bulgaria’s industrial production falls again in February

Mon, Apr 13 2009 09:17 CET

byDnevnik.bg

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Bulgaria’s industrial production falls again in February

Photo: Nadezhda Chipeva

Bulgaria’s industrial output continued to contract in February, falling 17.7 per cent year-on-year, preliminary figures from the National Statistical Institute (NSI) showed. The decline is sharper than in January, when preliminary data showed a 13.3 per cent slowdown.

However, final statistics for January revealed an 18.4% slump, which makes it difficult to predict whether the pace is growing or falling. Nevertheless, industrial companies are expected to close the year with lower volumes compared to 2008.

In an indication that the global financial crisis has taken a turn for the worse, investment and intermediate consumption products have been most severely affected. This signals slower investment activity, which drags down economic growth.

Investment and intermediate consumption products have shrunk by 29.6 per cent year-on-year. At the same time, industrial production expanded 5.6 per cent on the month, according to preliminary figures, which come after the unexpectedly high 19 per cent drop recorded in January. Final statistics for the first month show an even deeper monthly fall of 23.8 per cent.

"I expect the downturn will continue through the coming months, and industrial consumption will shrink by at least 10 per cent over the year," macroeconomist Dimitar Chobanov forecast. "Bulgaria will definitely plunge into recession this year but the question is how long it will remain there."

In the meantime, the NSI published a report on the Bulgarian construction sector, which recorded a 6.3 per cent increase on January.

Georgi Angelov, macroeconomist at the Open Society Institute, warned the increase should be taken with a pinch of salt because it may be driven by seasonal factors and government spending.

"Recession is a possible scenario but it is hard to predict whether it would come true. It all hangs on export markets for Bulgarian goods and services," he said.

Some rays of light are glimmering in the gloom over the whole industry, with Bulgarian Industrial Capital Association (BICA) chairperson Vasil Velev saying mining and processing companies could speed up economic activity at the end of the second quarter.

Source: Dnevnik

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