The business climate in Bulgaria has worsened by 3.4 points in August compared to July, according to the traditional survey of the National Statistical Institute. The uncertain economic environment remains a leading factor in the deterioration of expectations for the development of the economic situation in the coming months.

Entrepreneurs from the construction, retail trade and services sectors indicate that they expect a decrease in demand and supply of orders in their sectors.

Labour shortages and competition are also among the factors due to which managers give increasingly pessimistic forecasts for the development of the economy in the coming months.

• Lack of personnel and high share of people outside the work force - problems of the Bulgarian labor market 

Construction contractors note the prices of materials as a problem, and in the case of retail trade, orders to suppliers.

The index, which determines the business climate in industry, has decreased in August by 3.4 points compared to July, when it increased by 2.1 points.

In August 2022, the "business climate in construction" indicator maintained its level from July, when it decreased by 2.9 points.

• Record housing market prices in Bulgaria and still going up
  

The retail business climate composite indicator has dropped by as much as 9.0 points in August after a slight increase of 0.7 points in July, and the services business climate composite indicator fell by 1.0 points after stabilization a month earlier.

Against this background, the Executive Agency for the Promotion of Small and Medium-Sized Enterprises is conducting an information campaign to acquaint representatives of small and medium-sized businesses with the possibilities of applying for projects under the Recovery Plan.

• The current challenge: Economic growth in the face of political upheaval 
  

The first measure under the National Plan for Recovery and Sustainability, which will be implemented by the General Directorate "European Funds for Competitiveness" at the Ministry of Innovation and Growth, is Technological Modernization. A total of BGN 260 million will be invested under it, and the amount of the grant may reach between BGN 180,000 and BGN 700,000, depending on the size of the enterprise. Application to the program will be done entirely online until September 21. Companies must be registered no later than December 31, 2019, they must have realized annual net sales revenue for the last three years in the amount of over BGN 210,000 for micro, over BGN 750,000 for small and over BGN 3 million BGN for medium-sized enterprises.

The procedure is aimed at companies in four of the country's economic sectors - processing industry, water supply, sewage services, waste management and recovery, creation and dissemination of information and creative products; telecommunications and professional activities and research.

Will the Recovery Plan act as a lifeline for smaller companies in Bulgaria? In an interview with BNR, the economist and financial consultant Kuzman Iliev expressed skepticism regarding the possibilities of the Bulgarian administration to support the absorption of European funds. "Maybe people in the administration were startled by the political uncertainty. We are slowing down and no wonder we lose hundreds of millions of Bulgarian leva this year," he suggested.

Compiled by Elena Karkalanova

English version Rositsa Petkova