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September 2011
Macroeconomic indicators show consistent pre-crisis economic growth and quick post-crisis recovery
Real GDP Growth
6.6% 6.2% 6.5% 6.4% 6.2%
Bulgaria EU-27
Inflation
Bulgaria EU-27
2.0%
0.2%
6.1%
6.0%
7.4%
-5.5%
2004
2005
2006
2007
2008
2009
2010
2011 Q2
2004
2005
2006
2007
2008
2009
2010
Unemployment
12.2%
Bulgaria EU-27
FDI Inflow
mln.
6,222 2,736 3,152 9,052 6,728
9.2%
9.5%
6.9%
6.3%
2,412 1,639
2004
2005
2006
2007
2008
2009
2010
2011
2004
2005
2006
2007
2008
2009
2010
* August 2011
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Visible signs exist that the Bulgarian economy is emerging rapidly from the crisis
Exports ( mln.) Real GDP growth (% annual basis)
+28%
5,000
7% 6% 5%
6.6%
4.7%
3.7% 3.3%
4,500
4% 3% 2% 1% 0%
2.0%
4,000
0.0%
+83%
3,500
3,000
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011
-9%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011
Role of Bulgaria as FDI location has grown significantly for the last 10 years
Inward FDI per country ( mln.) 10,000 9,000 8,000 7,000 6,000
Czech Republic
5,000 4,000 3,000 2,000 1,000 0 -1,000 1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
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Source: UNCTAD
FDI in Bulgaria comes mostly from EU countries and is concentrated in four main sectors
FDI by host country, 1996-2010 ( mln.) (1) Netherlands (2) Austria (3) Greece (4) UK (5) Germany (6) Cyprus (7) Hungary (8) USA (9) Russia (10) Italy 3,763 2,948 2,646 2,229 1,362 Energy 1,337 1,229 1,221 Telecom Other 1,955 2,376 2,492 Manufacturing Trade Construction 2,608 6,552 6,425 5,740 5,183 Finance 7,422 FDI flows by industry, 1996-2010 ( mln.)
Real Estate
8,419
Page 5
Access to markets
European Union / EFTA Russia Turkey / Middle East
Page 6
Bulgaria enjoys one of the most stable political and economic environments in Southeastern Europe
Bulgaria is a member of some of the most prestigious political organizations
European Union member since 2007 NATO member since 2004 WTO member since 1996 the culture of impunity that once plagued Bulgaria has largely gone
May 27, 2010
Strong commitment to political reform and transparency has earned praise from leading media and experts worldwide Stable currency
Bulgarian Lev has been pegged to the Euro since the adoption of the currency in 2002 Currency board backed by IMF
While governments across the eurozone periphery are on the ropes or have been felled by the economic crisis, Prime Minister Boyko Borisov's government has drawn international accolades for cutting spending while maintaining high levels of public support.
September 10, 2011
Page 7
Government financial indicators are remarkable not only in the region, but on a pan-European scale
Average government debt (2005-2010)
120%
Greece
110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
Italy
France
Germany Netherlands Turkey Sweden Norway Finland Denmark Bulgaria Luxembourg Estonia
Ireland
Croatia Slovenia
Lithuania Latvia
0%
-9%
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
16%
Source: Eurostat
Page 8
Bulgaria is the only country in Europe with a credit rating upgrade by Moodys since the beginning of 2010
Ireland Portugal Estonia Malta Hungary Lithuania Iceland Cyprus Bulgaria Latvia Turkey
Ukraine Moldova
Greece
01/10
03/10
05/10
07/10
09/10
11/10
01/11
03/11
05/11
07/11
09/11
Source: Moodys
10% 16%
Romania 19% Hungary 19% 19% 20% 20% Slovakia Poland Czech Republic Croatia Slovenia
* 0% tax rate for manufacturing companies in regions with low employment
Page 10
Bulgarian cost of electricity for industrial users is 70% of the European average
/kWh, 2011
Estonia Bulgaria Romania Turkey Germany EU average Hungary Czech Rep Slovakia
724
Page 11
Bulgaria is only 3 hours flight from all major destinations in Europe, Russia and the Mediterranean region
Strategic geographic location Major transport corridors passing through Bulgaria
EU EF and TA
Page 12
The role of the European Union as a trade partner for Bulgaria has been growing consistently
Share of EU-27 exports has grown by 50 percentage points since 1995 ... in absolute terms EU-27 exports have grown approximately 5 times
10,000 9,000
EU-27
8,000
mln
7,000 6,000
Balkans Asia
16% 11%
5,000 4,000
21% 6% 18% 6% 15% 7%
3,000 2,000 1,000 0 1994 1996 1998 2000 2002 2004 2006 2008 2010
Other
14%
1995
2000
2005
2009
Page 13
Iceland Business Social sciences Engineering Education Health Law Architecture Agriculture Other 3,677 Greece 3,166 1,553
833 860
Page 14
The government supports specific industries under the Investment Promotion Act (IPA)
Investments must be related to the following sectors:
Manufacturing Research & development Education Healthcare High-tech services Warehousing and logistics
Page 15
Priority projects should exceed 50m and create at least 200 new working places for a 3-year period
25 + 100 working places for certain manufacturing projects 10m + 50 working places for high-tech services and R&D
Priority projects receive all benefits for certified investors, as well as the following:
Lowest possible costs for the acquisition of government and municipal land + waived taxes for land status changes Working group for project support is assigned by the Council of Ministers Financial grant scheme for up to 10% of the investment project cost (50% for R&D)
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Services:
Transport and Logistics Information technologies Outsourcing of business processes Health and tourism related to healthy lifestyle
Industry:
Transport equipment and machine building Electronics and Electrical engineering Chemical industry Food and Agriculture
Resources:
Mining Oil Alternative energy
Page 17
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InvestBulgaria Agency
InvestBulgaria Agency is a Government investment promotion arm, part of the Ministry of Economy, Energy and Tourism IBA services: Macroeconomic data on Bulgaria Legal advice Data on operational costs Regional information: industrial zones and infrastructure, data on unemployment, skilled labour force and level of education Recommendation of investment project sites Identification of potential suppliers, contract manufacturers and joint-venture partners Personalized administrative servicing Liaison with central and local governments Liaison with branch chambers and NGOs
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InvestBulgaria Agency Sofia 1000, 31 Aksakov Str. Phone: (+359 2) 985 5500 Fax: (+359 2) 980 1320 E-mail: iba@investbg.government.bg Web: www.investbg.government.bg