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Bulgaria Infrastructure Report Q1 2012
Business Monitor International, Jan 2012, Pages: 77
Business Monitor International's 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.
- Independent 5-year Infrastructure industry forecasts for Bulgaria.
- Original Infrastructure market research and Infrastructure sector trend analysis for Bulgaria.
- Competitive intelligence, Bulgaria Infrastructure company rankings and SWOT analyses on international and domestic Infrastructure companies in Bulgaria.
BMI View: Double-digit contractions in the Bulgarian construction sector during H111 have done little to bolster BMIs outlook for the Bulgarian infrastructure segment, and have damaged the chances of a potential recovery over the period 2011-2015. Although BMI anticipate that positive investor sentiment will return, BMI believe that sluggish private demand and the public sector’s fiscal constraints will impede a robust recovery in the infrastructure segment.
- Bulgarian construction company Patnostroitelna Tehnika has been awarded two contracts for construction work along the Trakiya Motorway. The contracts are worth an estimated BGN25mn (US$17mn), with the initial BGN10.8mn (US$7.42mn) contract for the design and construction of lot IV of the motorway, between Yambol and Karnobat.
- The Bulgarian government published a list of road improvement projects worth EUR9bn (US$12.5bn). The projects will be carried out between 2014 and 2020, and include the Sofia- Kalotina highway, the Kresna Gorge section of the Strouma highway, and the expansion of the Veliko Turnovo-Shoumen road. The EU will cover 80% of the construction costs.
- German bank BayernLB has announced it provided EUR17.965mn (US$24.5mn) for the construction of three solar power plants in Bulgaria. BayernLB's Bulgarian subsidiary MKB Unionbank has overseen the structuring and other aspects of the transaction.
BMI expect 2012 to pose significant challenges to the Bulgarian government, in particular to the ruling party GERB. The party will likely face high public discontent on the back of its failure to tangibly reduce corruption and gain entry to the Schengen visa-free travel zone, two key pillars of its election platform. Moreover, the deteriorating economic environment and rising ethnic tensions will further compound challenges facing the government. However, due to a weak opposition, we do not see GERB's power coming under serious threat in 2012, at this juncture.
BMI expect to see cost-push inflationary pressures continue to moderate going into 2012, as supply-side constraints on commodities unwind. BMI believe domestic demand-driven price pressures will strengthen through 2012, in line with BMIs forecast for a recovery in the labour market and in household consumption. BMI have revised down their forecast for Bulgaria's real GDP growth to come in at 2.5% in 2011 and 2.7% in 2012, from 2.7% and 3.3% respectively. BMI believe that slower growth in the eurozone will filter through to a weaker recovery in domestic consumption and a lower contribution from net exports.
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