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Bulgaria Infrastructure Report Q2 2011
Business Monitor International, March 2011, Pages: 83
Bulgaria Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bulgaria's infrastructure industry.
Core Forecasts
Our View: We anticipate a moderate construction market recovery in Bulgaria over the period 2011-2015, after two years of contraction generated by the global economic downturn. The private sector should drive this recovery in the country’s construction market, amid a wider economic upturn and fiscal constraints on the public sector’s ability to fund infrastructure projects.
Overall activity in Bulgaria’s construction market contracted by 4.9% in real terms in 2009, after growth of 9.8% in 2008. We estimate that the sector contracted in real terms by 4.6% in 2010. This marks a revision of our previous forecast for a contraction of 3.1% in 2010, due to poor data for the first nine months of the year, which showed a fall in real sector output of 5% year-on-year (y-o-y). However, we should see a return to moderate sector growth in 2011, at a rate of 2.9%. Our cautious optimism is underscored by the following:
- Bulgaria’s economy experienced real GDP growth of 2.1% y-o-y in Q410, taking growth for the year as a whole to 0.7%, compared to an earlier forecast of an annual contraction of 0.4%. This recovery should be sustained in 2011, helping to boost private sector activity in the construction market.
- Both the commercial property market (retail and office space) and the residential real estate markets should receive significant support from the recovery in real economic output, amid an improved outlook for commercial investment, consumer demand and disposable incomes. Toshiba, Tokyo Electric Power Company, Japanese trader Itochu and the government-backed Innovation Network Corporation of Japan announced plans to set up a joint venture (JV) in Bulgaria to build one of the world's largest solar power plants in January 2011. According to Agence France Presse, the plant, which should be built in the eastern city of Yambol by March 2012, is expected to cost more than JPY100bn (US$1.2bn). The project would contribute enormously to Bulgaria's efforts to reach its EU 2020 targets. It will start with an output capacity of roughly 50MW, which will be gradually expanded to 250MW by 2017.
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