Companies to start unblocking their investment projects in the middle of the year

• UniCredit Forecasts Renewed Investment Interest in Bulgaria

  
  
   
  
  Investment interest towards Bulgaria is set to start growing slowly after the summer of 2012, according to the chief economist of UniCredit Bulbank Kristofor Pavlov.
  The increased messages about the resolving of the euro zone crisis, and especially the reduced likelihood that Greece will abandon the euro are going to be an indication for the Bulgarian companies and households, Pavlov told the Euroclub at the Bulgarian Chamber of Commerce and Industry on Wednesday.
  "First of all, however, the improvement of outside conditions will influence the Bulgarian economy through the channeling of expectations," he stated.
  The chief economist of UniCredit Bulbank stressed that employment will be stabilized by the unfreezing of firms' investment projects in 2012 but that a more tangible improvement in the employment environment is to come after 2013.
  "Households will start changing their attitude by putting off less their purchases of long-term goods. In accord with the increase of the consumer demand, the demand for credit will start growing relative to the unsatisfactory levels at present," Pavlov explained.
  According to UniCredit Bulbank, Bulgaria's quarter-on-quarter growth rate will grow to 0.5%-0.7% in the last two quarters of 2012, up from the almost zero quarterly growth at the end of 2011. Its GDP growth forecast for Bulgaria in 2012, however, is 1.5%, which is lower than the 2% that the country achieved in 2011.
  "The start of the year will test the Bulgarian economy. The worsening external environment will affected exports negatively," Pavlov said, stressing that the declining real estate prices will be one of the hurdles for the Bulgarian economy.
  "We have ahead of us two or even three years in which Bulgaria's economic growth will be lower than its potential, with alternating periods of slowdowns and growth," he explained.
  
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• Companies to start unblocking their investment projects in the middle of the year

  
  
   
  
  
  Companies in the country will start unblocking their investment projects in the middle of the year which will stabilise the employment rate, according to an analysis of UniCredit Bulbank, presented by the bank's Chief Economist Christopher Pavlov, at a meeting of the EU Club with the Bulgarian Chamber of Commerce and Industry. 
  The report stated that the willingness of investors to take risk will begin to recover and capital inflows to the country will increase, albeit slowly. According to Pavlov, a permanent growth in employment will become a fact after 2013. Higher expectations of a favourable outcome of the debt crisis and the lower risk that Greece will abandon the Euro will send a clear positive signal to Bulgarian companies and households. People will start changing their behaviour over the year and the purchase of durable goods will not be postponed for as long as it has been until now. There are forecasts that the demand for loans will start recovering as well, compared to the unsatisfactory level at present. The ideas as to what level of financial leverage might be regarded as sustainable will evolve in a positive direction, thus further decreasing the pressure on households and private non-financial corporations to continue reducing their liabilities, stated the Chief Economist of UniCredit Bulbank.
  
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