Bulgarian exporters are increasingly seeking new niches and markets in developing Asia as a resulrt of the stagnating situation in Europe, states a report of Industry Watch, a Sofia-based consultancy.

"We expect Europe to be stagnating in the next 12-18 months, which will limit the growth potentil of Bulgaria's export-oriented sectors," says the Industry Watch report entitled "Is the End of Stagnation Near? Macro Risks in Europe and Bulgaria, and Perspectives for Major Industries in the Second Half of 2012 and 2013."

The consultancy points out that the main effect of the economic crisis in Bulgaria has been the decline of investments which have not recovered after the initial shock. At the same time, however, the report notes that Bulgaria's FDI is slowly starting to grow, as is the import of investment goods.

Industry Watch further predicts that bank credits for business will also start recovering, and that the current situation of the Bulgarian banking system allows rapid expansion of business credit given sufficient own capital of the entrepreneurs.

The consultancy predicts that Bulgaria's state revenues will grow only modestly in the said period necessitating deeper structural reforms, greater control on spending, and higher efficiency of the public sector.

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