In 2018 the foreign investments in Bulgaria dwindled with over half a billion Euro to EUR 800 million, preliminary data (from November 2018) of the Bulgarian National Bank show. Meanwhile, Bulgarian companies invested abroad nearly EUR 280 million. Bulgaria’s President Rumen Radeb noted several days ago that the authorities should take measures to encourage foreign investments in this country. However, Bulgaria’s Minister of Economy Emil Karanikolov contends that we cannot speak of a collapse of investments in this country and supports his thesis with the argument that in 2017 a total of 31 Class A investment projects to the tune of EUR 159 million were fulfilled, whereas last year 28 certified projects amounting to EUR 434 million were implemented.

Bulgaria’s has turned into one of the world’s biggest manufacturers of parts, units, and devices for the automotive industry. Over 100 foreign companies from this sector have business in Bulgaria. These investors employ tens of thousands of Bulgarian citizens and many of them are with low qualification and limited competence and skills. However, there are companies which change their business plans and decide to shut their subsidiaries in Bulgaria such as the Canadian ALC which recently closed its three Bulgarian units for custom-made upholstery for BMW and MINI over the shortage of manpower. One month ago the Norwegian owner of one of Europe’s biggest telecommunication companies Telenor announced its decision to sell its assets in several countries in Central and Eastern Europe, including Bulgaria. The powerful French bank Société Générale and the Greek Piraeus Bank undertook similar actions in the banking sector as well. So far, the international outsourcing companies and call-centers have kept their business interest in Bulgaria. However, they spend mainly on salaries and rent and do not make any substantial investments in this country. Meanwhile, we have witnessed another trend recently – investments of Bulgarian companies abroad have increased significantly, which caused controversial reactions, because practically we are talking about capital outflow. On the other hand, these companies have the opportunity to increase profits and turnover, which in one form or another return to Bulgaria.

Recently, the business observers paid special attention to two large Bulgarian investments abroad. The popular Bulgarian businessman and majority shareholder of one of the three telecoms operating in Bulgaria Spas Rusev bought the majority share in the second biggest mobile operator in Albania-Telekom Albania. The deal is estimated at nearly EUR 50 million. It is interesting to note that this Bulgarian investor does not hide his intentions to acquire other telecoms in the region of Southeast Europe and the Balkans. The other large business deal of Bulgarian investor was made in Moldova where Doverie United Holding took the control over the second-largest bank in this country Moldindconbank. The price of the deal was not announced in public.

Preliminary data of the Bulgarian National Bank show that foreign investments in this country have fallen. The Bulgarian cabinet has assured that we cannot talk about a collapse of the FDI’s in Bulgaria. However, one thing is for sure – lthe foreign investments in Bulgaria are insufficient and without enough foreign investments this country cannot catch up quickly with the more-developed countries in the European Union.

English version: Kostadin Atanasov