Bulgaria's Export May Suffer from Debt Crises in US, Europe

Georgi Stoev, economist and managing associate at Industry Watch Bulgaria, has warned about a forthcoming prolonged period of stagnation. Photo by BGNES

Bulgaria's export may be hit by the debt crisis in the US and many European countries, according to Georgi Stoev, economist and managing associate at Industry Watch.

In a Monday interview for Darik radio, he said that the world was now much better prepared for a new wave of an economic and financial crisis and was set to face a longer period of stagnation than originally forecast.

The economic expert conceded that the only remedy in this case was the reduction of budget deficits, which would not be easy for economies like the French, the German or that of the UK.

When asked whether the 2008 crisis, which started in America and spread to the rest of the world, would recur, Stoev said that "a repeat of the same episode of the same series will not take place, but a new episode of a longer period of stagnation is quite likely".

Stoev further explained that the impact of the new downturn would grow tangible much faster in comparison with the past meltdown, which took about a year to hit Bulgaria.

According to the economist, as regards demand for industrial raw materials and the orientation towards Bulgarian exporters, the problem would be felt immediately.

"Bulgarian exporters will experience reduced orders the very moment industrial production in Europe shrinks", Stoev declared.

In his opinion, export rates would suffer, but it would be far-fetched to say that the segment propelled the economy forward.

"A growth of 0.5-1.6% can hardly be called a real upward movement, so maybe we should refrain from talk of "engines" and "locomotives", the senior economist emphasized.

"Although many people lost their jobs over the past few years, I think that many people believe that things will take a turn for the better this year. I can see that the new-car market, the real estate market, etc, are livening up against the backdrop of these capital expenses. So I cannot tell if we are currently experiencing the most acute bout of the crisis, perhaps the worst is yet to come", Stoev concluded.

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