BIA: BUSINESSES ARE SEEING OFF A DIFFICULT YEAR AND DO NOT EXPECT A BETTER ONE

A great part – 75% of business representatives - are of the opinion that the economic environment in Bulgaria has deteriorated in 2012, some 21% say it has remained unchanged, and only 2% find an improvement in the conditions for doing business. These are the results from the annual survey of the Bulgarian Industrial Chamber (BIA) conducted among 500 managers and owners of companies in the December 1-10, 2012 period.

Some 46% of the respondents share the opinion that the economic situation of their company has deteriorated during the year, 33% have succeeded to maintain their performance at last year’s level and 16% reported an improvement. The most negative impact of the economic crisis has been that on sales, with 61% of the companies reporting a decline. Investments were also badly influenced – according to 51% of the respondents, followed by the volume of production (according to 49% of the polled businessmen) and the employment rate (according to 47% of the respondents).

A total of 79% of the polled businessmen assess the actions of the Government in 2012 aimed at overcoming the negative impact of the economic crisis as “rather unsuccessful”, 12% find it difficult to assess and only 9% give a positive assessment of the Cabinet’s anti-crisis policy.

Almost half of the respondents remain highly pessimistic about the development of the economic processes in 2013 and forecast a further deepening of the crisis, 30% do not expect any change and 16% hope for the trends to calm down.

The share of companies which have used bank credits in 2012 has increased by 16%, compared to 2011, from 63% to 79%. At the same time, an increasing number of companies (49%) manage to pay off their debts to the banks in due time. Restructured credits have decreased by 7%, from 25% in 2011 to 18% in 2012. In the last three years, the companies failing to pay their loans on time were some 11%-12%.

Obviously, businesses increasingly rely on bank lending and less on EU funds – some 65% of the respondents do not plan to apply for EU funding in 2013, 26% intend to do so and 9% have not decided yet.

“The lack of investments and the high indebtedness of Bulgarian companies have remained the major problems of businesses in 2012 and are expected to remain the same in 2013,” said Bozhidar Danev, Executive Chairman of BIA. According to him, the stagnation of Bulgaria’s economy is continuing for a third successive year now and will persist in 2013 as well. He forecasts a risk of a serious increase in electricity prices next year, which will adversely affect businesses.