Positive results in the Bulgarian economy will occur in 2012-2013 at the earliest, and the labour market will begin to stir a year after the end of the financial and economic crisis, according to Mika Zaikova, economic adviser of the Podkrepa Confederation of Labour.

Industrial production has declined by over 50 per cent, and the decline in construction is 56 per cent. The expected most optimistic scenario is for GDP growth to be zero, and the most pessimistic scenario is for 2.5 per cent to 3.6 per cent deficit, which is quite dangerous, Zaikova said.

Bulgaria possesses a considerable fiscal and foreign currency reserve, but it is melting at a high speed. "We are still far from the critical values for the foundations of the currency board arrangement, but in half a year the foreign currency reserve has melted by some 6,500 million and urgent measures need to be taken, Zaikova commented.

By the end of this year, unemployment will probably reach 14-15 per cent. Between 100 and 150 companies go bankrupt monthly on average.

The proceeds of foreign investors are "at a catastrophic level and they are not likely to improve." Bulgaria is not attractive for foreign investment due to the lack of high technologies and qualified experts, and the reason is that employers do not invest in the qualifications of their employees, the expert believes.

The monthly cost of living of a member of a household of four members (two adults and two children) in the end of June reached 480.70 leva, which means that a household should have 1,923 leva a month in order to maintain a healthy diet according to the norms of calorie content of food, to maintain its expenses for the home, to buy clothes and pay for education, Lyuben Tomev, Director of the Institute of Social and Trade Unionist Studies (ISTUS) with the Confederation of Independent Trade Unions in Bulgaria (CITUB), told a news conference.

Sales of foods and nonfoods are declining, employment is also declining and incomes are kept unchanged, and a policy is followed of freezing wages, Tomev said. According to him, these indices increase the fears of Bulgarians about what will happen until the end of this year.

In the first four months of this year, insured persons decreased by 140,000 people at the National Social Security Institute and at the National Revenue Agency compared to the like period of 2008, Tomev added. In his words, the decrease of insured persons means that unemployment is increasing. Since the end of last year, some 100,000 people have been laid off according to CITUB data, and how many of them have started work again is impossible to say, Tomev said. According to the ISTUS analysis, in terms of unemployment in May Bulgaria remained below the average level in the EU. In the 27 countries of the EU, unemployment in May averaged 8.9 per cent, and in Bulgaria it stood at 6.5 per cent.

In the first five months of 2009 there were no clear changes in the dynamics and structure of household incomes which would serve as an indication of the approaching crisis, ISTUS said. A similar trend was observed with the average wage in Bulgaria. After the record large nominal increases of wages by 19.7 per cent in 2007 and 21.7 per cent in 2008, in the first quarter of 2009 the increase compared to the first quarter of 2008 was 16.3 per cent.

In a comment on Friday, the Economic and Social Council (ESC) outlined the following measures: building of modern transport infrastructure, separation of the State from the direct management of commercial corporations, particularly monopolies, and liberalization of the energy market according to the requirements of EU regulations.

The groups on which future government policies and measures should focus, according to ESC, are real sector business, consumers and their households, as well as social security, public health and education. ESC experts note that employers should not adhere to a policy of freezing or containment of wages as an unconditional anticrisis measure. According to ESC, the link between productivity and wages has been practically broken and the share of the shadow economy is increasing. Therefore ESC recommends preparation and working out of scenarios for a deficit national budget in 2010.

"Our main message is a new integrated anticrisis programme," said Plamen Dimitrov, Deputy Chairman of ESC and Vice President of CITUB. According to him, some 500,000 people should go through urgent measures of training and retraining. He recommended special treatment of people who return from abroad - tens of thousands of the 180,000 Bulgarians working in Spain have already returned to Bulgaria. These are people with acquired qualifications, and employers can provide work for them in this country.

ESC experts assess the decrease of social security contributions as risky for the social security system. Dimitrov recommended that ESC propose setting the minimum monthly wage at 60 per cent of the average monthly wage, which is currently 560 leva. Such is also the recommendation of the EU, Dimitrov added.

Source: BTA