Bulgarian Industrial Capital Association Head Sees Signs of Fragile Economic Recovery
Vasil Velev, Chair of the Bulgarian Industrial Capital Association (BICA), has rejected allegations of an upward trend in corporate bankruptcies, stressing that H1, 2015 data testifies to the opposite.
Bulgaria’s Registry Agency announced on July 16 that the number of bankruptcies had gone up by 34% on the year in H1, 2015 to a total of 341 companies.
In a media statement published on July 23, Velev opposed the claims of the Bulgarian Registry Agency, adding that the first quarter of the year had brought GDP growth of 2%, higher than the forecast for the period, and that there had been a double-digit growth in export and an increase in the employment rate and a decrease in the unemployment rate.
“We can say that we are witnessing economic revitalization, be it only fragile,” he stated.
Commenting on the increase in bankruptcies, he noted that it was hardly surprising, taking into account that these procedures had been initiated in an earlier period.
He admitted that the result could be attributed to the bankruptcy of the Corporate Commercial Bank (KTB, Corpbank) as a number of its borrowers had gone bankrupt.
Velev claimed that even though this was he case with hundreds of companies, the number was not representative of the sector.
The BICA Chair insisted that Bulgaria’s economy had greater growth potential than it was utilizing and that the European economy was also showing signs of stabilization.
He admitted that the crisis in Ukraine, the sanctions on Russia, and the situation in Greece were suppressing these positive developments.
Velev reminded, however, that the more expensive US dollar had a beneficial impact on Bulgaria’s exports to dollar-based markets.
Regarding suggestions that some 60 000 Greek companies would relocate to Bulgaria, he said that the fact that Greek entrepreneurs were opening accounts in Bulgaria would not be felt immediately but rather over a longer period of time.
Velev said that it was certain that a large number of Greek companies would gradually move to Bulgaria, especially if the crisis there deepened.
He pointed out that there was a spike in registrations of property and vehicles of Greek businessmen, adding that the trend was unusual for the summer months.
Regarding the future of the EU and the euro currency, Velev suggested that the insufficient integration was one of the reasons for the existing situation.
“Despite the complaints about it, the German domination in Europe cannot come to an end as long as the German economy remains the strongest one and the country remains the largest contributor to the EU budget,” he declared.
The Chair of the BICA recommended seeking opportunities to boost Bulgaria’s exports.
“Taking into account that we are an open economy, we can only benefit from increasing the participation of Bulgarian companies in third countries which are experiencing a more dynamic growth period. We should not confine ourselves to the EU, especially now, when the European economy is at a standstill due to unwise political decisions,” he stated.
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