Headlines (September 20 2002):
BULGARIA LOGS 4.3% ECONOMIC GROWTH FOR FIRST HALF OF 2002
Bulgaria's economic growth for the first half of the year is 4.3%, the National Statistical Institute announced. The GDP for the period is BGN 471.17 million or $ 6 649.65 million. This makes $ 836 per capita. The per capita GDP indicator, gauged by the purchase power parity /PPP/, ranks Bulgaria 11th among the 13 EU aspirant countries.
Finance Minister Velchev is exultant over the fact that Bulgaria has gained a 5.3% economic boost for Q2 /in relation to the like quarter of the previous year/, which is the highest Q2 growth in Europe.
NSI mollifies the enthusiasm by pointing out that Bulgaria's GDP comes to ? of the GDP of other candidates for EU membership and to ? of the member-countries' GDP.
Optimistic is the structure of the growth, experts underrate. In spite of the still negative foreign trade balance - BGN 1,193 million -, exports in some sectors are on the increase.
REINVIGORATED INTEREST IN ENERGY COMPANIES.
A contract was signed officially with the French Paribas Bank, which was selected consultant in the sell-out of the 7 energy-distributing companies. Immediately upon signing, several domestic and foreign candidate-buyers have indicated their strong interest, among which the Russian National Energy Company, sources of the Energy Ministry disclose.
Over 65 companies will be approached these days with detailed information on the assets and performance of the 7 utility companies, slated for sell-off. The French consultant will get the entire documentation and prepare the information memorandum.
It is believed that the initial understanding with Paribas for a12- month-term to reach a deal, might be shortened.
According to primary assumptions, stakes from 51% but not more than 80% in the energy companies will be offered for sale. After the purchase of the majority package by strategic investors, the remainder of shares will be floated on the capital market.
The 7 electricity-distributing companies will be sorted in 3 groups, so that the each group embraced over 1 million consumers. The consultant will be entitled to make re-grouping.
Paribas will form a consultancy consortium along with 5 more members.
PARLIAMENT ENDORSED NEW FOREIGN DEBT SWAP DEAL
Parilaiment has authorized the Finance Ministry to embark on a fresh swap operation, transforming part of the foreign debt in Brady bonds into new global bonds. The contract with the intermediaries of the swap, JP Morgan and Salomon Smith Barney, was ratified.
The operation's objective is to relieve Bulgaria's foreign debt burden. Finance Minister explained that the swap of $ 750 million will free security of $ 151 million and the volume of the debt will be reduced by $ 87 million. Consecutively, debt payments over the next 10 years will drop by $346 million.
IMF MISSION: BUDGET PERFORMANCE IS EXCELLENT
Budget performance this year is being excellent, there are indicators that economy is doing well, this the opinion of the visiting IMF mission leader Jerald Schiff. He expressed confidence that budget revenue and expenditure will be on target.
As usual, eventual risks for the budget stability are likely to come from sectors under structural transformations, which get high state subsidies. The IMF mission leaders believes, inflation will be kept below the forecast digit of 7.25%. The economic growth, registered in the Jan-June period, Mr. Schiff described as a pleasant surprise.
The macroeconomic framework for 2003 sets in economic growth of 4,5%, inflation of 4,5% and budget deficit of 0,7% and currency account deficit of 5% to 5,5%, Minister Velched reminded.
EBRD's director for Bulgaria John Shommel-Dow and the executive director of Unionbank have officially signed the agreement under which the EBRD gains ownership on 15% of the bank's assets.
This is EBRD's the first investment in a Bulgarian bank in five years, Mr. Shommel-Dow said upon signing. He added that the banking sector is being very strong and stable now, the progress over the last five years has been fantastic. "You have now strong banks, hefty foreign investments in the sector and a remarkable advance in the bank privatization", he said, adding that there is still plenty to be expected in business crediting, development and deployment of new products.