There are positive aspects of the economy, but any new conflict and geopolitical instability could lead to a further cooling of the economy.
This is what the Minister of Economy Bogdan Bogdanov told BNR and stressed that in 2023 there is an increase in the Bulgarian economy:
“The European Bank for Reconstruction and Development and the IMF have revised their forecasts in a positive for further growth in the Bulgarian economy. We are already seeing growth to nearly 2%. Another positive fact is that we retain the confidence of investors. For the first 6 months of the year we are reporting levels of €2 billion, which is close to last year’s levels.”
He further clarified:
“We expect the measures that are being imposed to reduce inflation in Europe and in Bulgaria to bear fruit. We have already seen it in the major economies – Austria and Germany even went into recession. We reported this data and in terms of export growth this year, it decreased by 7.6 % compared to the previous year. It means that at the moment, and in the short term Bulgarian companies can expect stagnation, less consumption, for their main traditional markets such as the European ones. Because of this, Bulgarian business needs look at other markets as well.”
Minister Bogdanov pointed out that the government’s policy should be seen through the focus of the big goals – the country’s accession to Schengen and the euro area.
“Bulgaria is absolutely ready to be a full member of Schengen, as well as to be part of the euro area from January 2025 … We cannot remain in the periphery if we want Bulgaria to be a prosperous country”.
In the words of the economic minister, the Bulgarian market is not isolated, but is influenced by the exchange prices of fuels:
“The derogation of the Russian oil waiver has a deadline set by the EC. We need to make sure that the refinery works with non-Russian oil but continues to operate at maximum capacity. Our state will strictly monitor Lukoil’s switch to non-Russian oil. Now the schedule is by law. We have set production volumes in the law that Lukoil Neftohim must maintain so that we do not reach a point when the refinery will significantly reduce its production and lay off workers.”
Bogdanov was adamant that if the specific commitments of Lukoil Neftohim are not fulfilled, the state can intervene to preserve this strategic asset for the country:
“The special commercial manager will be proposed by the Minister of Economy to the Council of Ministers. We are ready to respond if necessary.”
The Minister of Economy explained that Lukoil Neftohim did not pay its contribution to the energy security fund because by law it had to be notified by the EC, but this was not done by the caretaker government and only now the Denkov cabinet has requested such notification.
“The positive thing was that after we got the derogation, Lukoil was forced to pay taxes in Bulgaria. They paid once and we expect 270 million BGN for this year. … This is how the law is made that importers, manufacturers and traders must have a Bulgarian legal entity through which they carry out their activities. This means that no matter how the situation with the derogation develops, the taxes have to be paid in Bulgaria. We have three requirements regarding the operator in Bulgaria – to pay its taxes in Bulgaria, the refinery to continue to operate at its maximum capacity and to comply with the law as mandated by the EC,” Bogdanov said.
“For the main consumer basket, the small one, to which the most vulnerable compatriots are oriented, we have focused measures. If necessary, we will also take legislative measures to ensure that the 15 products that are included in the small consumer basket are at the best possible prices for the most vulnerable consumers. We are in a good dialogue with the business,” the Minister of Economy said and specified that part of the measures is to make as many products as possible locally produced. These measures will be implemented before the winter period, he stressed.
We do not have and have not had any restriction on arms exports directly to Ukraine, Minister Bogdanov said, adding:
“If we have long-term projects and opportunities that our public and private enterprises could benefit from, we have no restrictions and they will be considered by the departmental committee. VMZ is in good condition both in terms of production capacity and markets. The aim is to modernise production and to maintain markets, of course. We have to focus on certain products that will be relevant in the next 10-15 years. A certain level of ammunition that is NATO standard. The MoD has made a lot of efforts to enable Bulgarian companies through the programmes currently available at the European level to modernise production and expand production capacity, especially targeting 155mm projectiles, which will be in high demand at the moment.”