78% of German Businesses Would Repeat Investments in Bulgaria - Survey

A total of 56% of the participants in the 2013 edition of the Business Climate in Bulgaria survey of the German-Bulgarian Chamber of Commerce and Industry (GBCCI) believe that the economic situation in the country will not change in 2013 compared to 2012.

At the same time, 23% of the polled expect improvement, while 21% say that the economic situation will deteriorate, econ.bg informs.

A total of 46% of the polled German companies describe the current economic situation as bad, while 43% say that it is satisfactory.

The authors of the 2013 survey mention that it was compiled in the period February 4 – March 4, 2013, a period of social unrest and political changes, taking into account the  collective resignation of the center-right GERB government on February 20.

Despite the uncertain situation in the country, 78% of the respondents say that they would invest in Bulgaria again, compared to 65% in the 2012 edition of the survey.

However, the estimation of Bulgaria's political and social stability has grown more skeptical compared to 2012.

The 2013 edition of the business survey was conducted among 108 companies, all of them members of the GBCCI.

A total of 76% of the respondents are small and medium-sized enterprises with up to 250 officials, while 24% are big companies.

The willingness of German investors to invest in Bulgaria is backed by statistics of the Bulgarian National Bank.

According to BNB data, Bulgaria attracted as much as EUR 177.7 M in foreign direct investments from German businesses in 2012, or 12% of the total volume of FDI in the country, following an outflow of German investments in 2011.

Plans of German entrepreneurs to invest in Bulgaria, however, do not match their estimation of the business climate, with 46% of the respondents describing the economic situation in the country as unfavorable.

Their expectations for the future are conflicting, as 56% believe that the business climate will remain unchanged in 2013, while 23% expect a positive development.

A total of 36% of the respondents say that their own company is developing well, while 11% report negative trends.

A total of 45% of the polled expect the situation of their company to improve in 2013, while 11% fear worse results.

In 2012, Bulgaria's exports to Germany amounted to EUR 2.2 B, more than Bulgaria's exports to any other country, the GBCCI notes.

At the same time, German imports in Bulgaria amounted to EUR 2.6 B in 2012.

The volume of trade between the two countries climbed to a new record in 2012, reaching EUR 4.8 B.

According to the respondents, Bulgaria's major political and economic problems continue to be the inefficient public management, weaknesses in the judicial system, opaque public procurement deals, corruption, and the lack of reforms in education.

The participants in the survey give a positive evaluation of the 10% flat tax rate, saying that it allows investors to generate capital quite fast.

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