GAS PRICE UP BY FIFTH?
Starting on July 1, the price of natural gas is set to increase between 15 and 20 per cent if high prices of crude on international markets persist, sources from gas company Bulgargaz said. Crude is a main component in the gas calculation formula. Last week, crude reached an all-time high of $126 a barrel. The current gas price is calculated on the basis of $100 to $105 a barrel. Bulgargaz is set to file its proposal by June 12.
HIGH INFLATION
Average inflation in Bulgaria will remain high this year and there was “a considerable risk” that recent one-off effects would translate into an even more significant and protracted increase in inflation, the European Central Bank (ECB) said in its latest convergence report on May 7 2008. The report is the first issued by the ECB after Bulgaria joined the European Union in January 2007. Between April 2007 and March 2008, the 12-month average rate of the harmonised index of consumer prices inflation was 9.4 per cent. The ECB uses the indicator to assess a country’s readiness to adopt the euro under the price stability criterion.
GERGOV TAPS TO ROADS
The business interests of Bulgarian tourism boss Georgi Gergov expanded into road maintenance with the purchase of Plovdiv-based Putishta AD, Dnevnik daily said on May 7, quoting unnamed sources close to the deal. The road maintenance sector is currently dominated by Bulgaria’s richest man Vassil Bozhkov, who owns Putishta Holding and Moststroy, and Trace Group, majority-owned by Nikolai Mihailov. Gergov, owner of tour operator Slunchev Den and chief executive of Plovdiv International Fair, confirmed the report, adding that the transaction took place several months ago and was already registered with the Central Depository. He declined to name the value of the acquisition.
CO-OPERATION MULLED
Bulgaria’s central depository has been in touch with its Romanian counterpart to discuss the possibility for co-operation, said Adriana Tanasoiu, the chief executive of the Romanian central depository. Her Bulgarian counterpart, Lyubomir Hristov, confirmed the news, saying that the reason for the inquiry was the interest of a Dutch-registered issuer to list on the stock exchanges in Sofia and Bucharest.
UPBEAT ABOUT ECONOMY
Bulgaria’s economy will expand by about six per cent, economic think-tank the Centre for Economic Development (CED) said in its quarterly economic report released on May 12. The January-March 2008 data give reason to believe that economic growth would be higher than in the same period a year ago, CED analysts told a news conference. While last year growth was 5.5 per cent, in the first quarter of this year it was expected to reach six per cent. The CED was also upbeat about inflation, despite its pick-up in the opening months of the year. It turned down gloomy forecasts for double-digit inflation for the full year. Despite high inflation early this year, the CED expects deflation in the May-August period.
EXCISE DUTIES
Bulgaria’s National Revenue Agency (NRA) will begin collecting excise duties starting January 1 2009, the council of the ruling coalition decided at its May 11 meeting. The NRA will take over this activity from the Customs Agency. Until the end of 2006, excise duties were collected by the tax administration. The ruling coalition decided against merging the NRA, Customs Agency and the State Receivables Agency (SRA) into one institution that would collect all state revenue. The SRA, however, would become a directorate within the NRA in two months’ time. SRA, long criticised for its inefficiency, is currently an independent authority supervised by the Finance Ministry.
TRADE DEFICIT AT 2.75B
Bulgaria’s trade deficit reached 2.75 billion leva as of end-February 2008, according to National Statistical Institute (NSI) preliminary data released on May 12. January-February 2008 export, in FOB prices, reached 4.538 billion leva, an increase by 30.7 per cent against the same period a year ago. Import, in CIF prices, totaled 7.265 billion leva, a 25.1 per cent year-on-year increase. Exports to EU countries rose by 24 per cent and imports by 11.6 per cent. Bulgaria’s main EU trading partners remained Germany, Italy and Greece. In the first two months of 2008, Bulgaria changed its trade balance with Greece from a 90 million leva deficit in the first two months of the year to an 80 million leva surplus.
