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Bulgaria’s business optimistic about 2019

Wednesday, Nov 28, 2018

The year is almost coming to an end and it is time to draw up a balance sheet and see what has been done and what can be done better next year. 2019 will be a year of elections and the politicians are now generous in their promises. They are persuading the employed that wages will grow, inflation will be low and that the taxes and fees will remain unchanged. The news that the salaries of the Bulgarians employed at the budget sphere will increase with 10% on average and the wages of the Bulgarian teachers will see a 20% increase in 2019 stirred discontent among the Bulgarian business. The society is now picking the fruit of the unbalanced increase of the minimum salary in some sectors of the national economy in 2018. The sustainable wage increase must be linked with achievement of concrete goals only, the President of the Bulgarian Chamber of Commerce and Industry Tsvetan Simeonov told Radio Bulgaria and added:
The increase of the salaries of the Bulgarian teachers does not mean a better quality education. It may turn out that nearly 40% of the high-school graduates in 2019 will be functionally illiterate. Some companies even train and teach their own personnel. They start training students when they finish the 8th grade to make sure that they can prepare well their future employees in the course of three years. However, these employers are facing huge difficulties, because it turns out that the people teaching these students technical lessons often have to start with reading and writing first. Unfortunately, this is what practice in some Bulgarian regions shows.

Tsvetan Simeonov announced at the end of last week data of a large economic survey among 45,000 companies in 26 European countries, including 500 companies in Bulgaria. The survey analyzes the difficulties the Bulgarian and the international companies face in their business activities, their expected revenues from business activities in Bulgaria and abroad, their investment and employment adjustments, as well as their business climate expectations. The analysis about Bulgaria shows that the business expects that 2019 will be more successful than 2018. Over half of the surveyed forecast that their revenues will grow next year and 10% contend that business climate will deteriorate. The annual inflation is expected to fluctuate between 3% and 4% and the budget deficit amounting to 0.5% of the country’s gross domestic product is rather symbolical, the Bulgarian business contends. The deficit of well-trained and qualified personnel is the biggest problem of the Bulgarian companies. The regional imbalance in Bulgaria is also a huge problem. The companies in North Bulgaria voiced their discontent of the lack of good road infrastructure, including a motorway that would facilitate transport, which places them in a disadvantageous position as compared to the companies in South Bulgaria.

The Bulgarian companies manage to forecast the future more precisely. Their expectations are more realistic than the expectations of the companies abroad, Tsvetan Simeonov says and adds:

The investors are monitoring the situation very carefully. Even the statements of opposition political parties affect the adjustments of the potential investors. We know for sure that some investors are delaying their business plans in Bulgaria due to intentions for introduction of progressive taxation, which would increase their expenditures sharply. It is not wise to decrease value added tax of some products and services without making a preliminary detailed analysis. Increased labor costs are the biggest threat to the employers, the survey reads. Moreover, the prices of energy and raw materials started to fall. The companies operating abroad are less worried than the Bulgarian companies. Being representatives of the Bulgarian employers we will continue to insist for a mechanism for determining the minimum monthly wage and on the abolishment of the minimum insurable income thresholds. The discrepancies between employers and government have increased due to the unrealistic increase of the minimum salary.

Source: bnr.bg