Bulgaria's economy to head for recovery in 2011

Bulgaria's economy to head for recovery in 2011

Bulgaria's economy will start to recover gradually in 2011, underpinned by a growth in export and small domestic investments, gathering more momentum in the second half of the year, according to a poll carried out by Dnevnik among economists and business representatives.

The growth in economy is projected at 2%, below government's expectations for a rise of 3.6%, with the surge in prices and flagging consumption seen as the main risks, as they might make households believe they could spend less.

The unpredictability in the actions of the country's government is also considered a major, albeit probable, challenge to the economic recovery, since the Cabinet will have the task to restore investor confidence abroad in order to bring back capital flows to the country.

After more than two years being in the grip of the crisis, however, the business has already started to restore its optimism, although companies are still cautious of staking hopes on 2011.

"We are now in a period of quiet optimism and I hope that business will begin to recover in late 2011. We will continue to make investments this year, with new employee appointments to be on the agenda only after completing our investment programme and creating new capacities," said Vasil Aleksandrov, executive director of fertiliser plant Agropolychim.

Meanwhile, bankers expect that lending will begin to rebound gradually, in view of financial institutions' emerging appetite towards loan extension.

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