DW: German Businesses Prefer Trade with Bulgaria over InvestmentViews on BG | January 2, 2017, Monday // 14:32| views
File photo, EPA/BGNES
German businesses prefer to trade with Bulgaria rather than invest into the country, an article on DW Bulgaria's website argues.
Bilateral trade has posted a sevenfold increase since Bulgaria joined the EU in 2007 and is likely to reach EUR 7 B in 2016, with the volume of exported goods by Bulgaria now being just 25% lower than the one imported from Germany.
Trade is considered much more lucrative and secure when it comes to Bulgaria and German businesses adhere to this as an unwritten rule. Even though some landmark companies such as Siemens, Liebherr, Lufthansa Technik and Aurubis have set up some relatively large production facilities in Bulgaria, the country "has been left bypassed by the big financial inflows," according to DW.
At the same time Metro, Kaufland, Lidl and other retailers managed to dominate the country's retail trade sector.
Carmen Struck, deputy head of the German-Bulgarian Chamber of Commerce and Industry, has cited data from a survey among 500 German businesses which indicates around 80% of respondents are willing to invest in Bulgaria again and 57% give a positive assessment to the business climate.
Struck is also quoted as naming Bulgaria's location, favourable tax regime and low labor costs as factors attracting foreign businesses.
Kaufland Bulgaria, with a yearly turnover of BGN 1.4 B, is sigled out as an example of a German company that ranks among the biggest taxpayers.
Lack of skilled labour and the countinuous brain drain from Bulgaria to Western Europe, however, pose obstacles to companies intending to invest in the country, Struck is quoted as saying.
Bilateral trade, on the other hand, is also somewhat hindered by feeble consumption, which is caused by the low income of Bulgarians.
Authorities have to work to improve the business environment, enhance the rule of law and crack down on corruption and mismanaged public procurement, Struck has argued.