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Is the Bulgarian industry about to disappear
submited on 09.10.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
submited on 09.10.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
The most reliable statistics about the development of material production in Bulgaria in our opinion is the NSI data for foreign trade. In the twelve months before June the export is growing at 20%, measured in euro (some EUR 2.5 billion more), in comparison with the previous 12-month period. Bulgaria tends to become even more open to the world, as it becomes more difficult to speak of “Bulgarian industry”. It comes down to production, which is becoming more and more integrated with other enterprises abroad.
In the structure of export most rapidly is growing the share of energy resources, which is expected with regard to the rising relative prices of energy. After the energy resources the fastest growth is with investment goods – machinery and industrial equipment (37% in nominal terms).
Metals have the biggest share in the export of Bulgaria, almost 1/5, however constantly shrinking. The low-efficient production in the heavy industries will tend to contract. The most recent years were favorable for the producers of metals, chemicals and other basic resources, as they suggested increasing prices of commodities on a global scale. Now the times have changed, as we forecasted, and many of the enterprises will have to make considerable restructuring, in order to reach higher efficiency or to disappear.
The dynamics of imports confirms that material producers in Bulgaria are more and more integrated internationally. The material import represents now more than 78% of GDP according to recent data. The imports of investment goods are leading with share of 30%, nut that is not the only line of international integration. Raw materials take some ¼ of the material imports, from which half represent imports of metals and ore. The share of energy resources imports is similar.
Contrary to many expectations that import is growing mainly due to household consumption (and therefore the conclusion that it is dangerous if not covered with adequate growth of export), the import is determined primarily by demand from Bulgarian industrial enterprises. Hence, the fast growth of imports must be considered rather a positive for the development of the Bulgarian industry.
In the structure of export most rapidly is growing the share of energy resources, which is expected with regard to the rising relative prices of energy. After the energy resources the fastest growth is with investment goods – machinery and industrial equipment (37% in nominal terms).
Metals have the biggest share in the export of Bulgaria, almost 1/5, however constantly shrinking. The low-efficient production in the heavy industries will tend to contract. The most recent years were favorable for the producers of metals, chemicals and other basic resources, as they suggested increasing prices of commodities on a global scale. Now the times have changed, as we forecasted, and many of the enterprises will have to make considerable restructuring, in order to reach higher efficiency or to disappear.
The dynamics of imports confirms that material producers in Bulgaria are more and more integrated internationally. The material import represents now more than 78% of GDP according to recent data. The imports of investment goods are leading with share of 30%, nut that is not the only line of international integration. Raw materials take some ¼ of the material imports, from which half represent imports of metals and ore. The share of energy resources imports is similar.
Contrary to many expectations that import is growing mainly due to household consumption (and therefore the conclusion that it is dangerous if not covered with adequate growth of export), the import is determined primarily by demand from Bulgarian industrial enterprises. Hence, the fast growth of imports must be considered rather a positive for the development of the Bulgarian industry.
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