Jan Bartholomeus, Regional Director of ING Wholesale Banking Bulgaria: GDP to go up in 2010. Investments down by 1.3%

Diana Iossifova

What is your opinion about the condition of the Bulgarian economy at the moment?
- Currently, Bulgaria like many countries in Europe, is still in recession with shrinking sales in the industry, limited domestic demand and unemployment, which is rising by a relatively moderate pace. For 2009, GDP is expected to contract by 5 %, investments by 15.6 % and private consumption by 5.1%. There are also positive signals, such as: signs of recovery among the major trading partners like Germany, the slowdown of the decline rate of sales in the industry, improvement of the indicator for 'business climate in industry' for the fourth consecutive month now. The increase of actual and predicted unemployment will continue influence demand at least until the first half of 2010 and will inhibit growth and economic recovery. For 2010, we expect GDP to report a weak growth of 0.2%, investments to fall by 1.3% and private consumption to recover slightly by 0.2%. The important point is that the Government restored the fiscal discipline and significantly reduced the deficit for the first two months of its rule, balancing the budget for October and aiming at a budget surplus in November. The latter was necessary for maintaining the public trust and confidence in the stability of the currency board.

What do you think about the business environment in the country?
- To businesses and households, the currency board means the stability of the local currency and a lack of pro-inflation fiscal or monetary policy. Furthermore, the fact that Bulgaria is part of the EU, facilitates business. But the country is still associated with the presence of high corruption and organized crime. The Government has already showed that it is taking steps in the right direction to curb corruption among Customs and Tax authorities, and also in public procurement procedures. Businesses are also concerned about the effectiveness of the judiciary system.

What are the key questions you would like to ask the ministers involved in the Eighth roundtable with the Bulgarian Government?
- We would like to receive more information on the idea of the 'electronic government'. How will the ambitious plans for improving infrastructure be financed? Will private capital be sought for the realization of larger projects?

When do you expect the recovery of the Bulgarian economy?
- Bulgaria entered the recession later than most European countries and is now likely to also lag behind in its recovery. GDP growth for the fourth 2009 quarter will be to some extent supported by the lower base, but still, a further deterioration is likely to arise. In the first quarter of 2010, Bulgaria's economy will probably begin to recover gradually, but it is possible to see positive growth rates by the second half of the year. For the entire 2010 we predict a GDP growth of 0.2% and 2.8% in 2011. Bulgaria's economic growth will largely depend on the degree of recovery of major trading partners in Europe.

ING had a profit of €499 mln for the last quarter of 2009. Is this really a positive signal for the end of the crisis and when should we expect news like this to become more frequent?
- Of course, it is certainly a positive signal for ING bank. Nevertheless, one swallow does not make a summer. This must happen with all or at least the majority of the companies in the industry and services.