text and photography by Anthony Georgieff

2011 was awful but 2012 will be worse, Bulgarians think

bulgarian economy_0.jpg

From bad to worse? According to a poll by Alpha Research published at the end of 2011, the majority of Bulgarians consider 2011 to have been "the worst" since the economic collapse of 1997. In that year, a Socialist government allowed a bunch of banks to go bust, three-digit hyperinflation ran wild, the overwhelming majority of Bulgarians lost their life savings and a few select "businessmen" made a fortune by borrowing in leva whilst repaying in hard currency. Those were the years of petrol smuggling into what was then Yugoslavia, of unbridled corruption in the customs service and of a general breakdown of law and order.

Coming back to 2011, just 10 percent of those polled consider it to have been "better" than the previous year, while 51 percent say it was significantly worse.

Against this pessimistic background, the majority of Bulgarians view 2012 with trepidation. They fear that the economic crisis will worsen, inflation and unemployment will go up, and incomes will drop further.

In Bulgaria's "boom years" of 2004-2008, a quarter of Bulgarians thought the country was moving in the right direction. After the 2009 general election, when Boyko Borisov's GERB assumed power, the number of optimists increased to 30 percent of those polled. At the end of 2011, however, their number has gone down to just 14 percent, according to Alpha Research.

Of those polled 65 percent say that the economic situation in Bulgaria is worsening, while 53 percent, or every second Bulgarian, considers his family's economic situation to have deteriorated in 2011.

The poll also indicates that the majority of Bulgarians are definitely not optimistic either about the likelihood of foreign investment increasing, or easier access to bank credits for the country's businesses.

Every second Bulgarian expects the crisis to get worse, with 45 percent anticipating delays or failures in the payment of their wages, pensions and social benefits. 40 percent fear higher inflation, 37 percent expect tax hikes, and 30 percent foresee interest rates increases.

Their pessimism has a direct impact on Bulgarians' spending habits as well. About 37 percent do not spend anything beyond what is absolutely necessary, while 47 percent try to spend as much as they can, fearing inflation will render any savings they have useless.

Property prices in Bulgaria will continue to fall, experts say, but it is difficult to predict whether the downward trend will be gradual or whether the property market will crash like it did in 2009. In Sofia, the average price of residential property is 40 percent lower than in 2008, as buyers now typically pay 700-750 euros per square metre. The majority of properties are bought by first-time buyers, usually young families, who take out mortgages to buy small flats. Russians continue to be the chief purchasers of holiday properties.

The citizens' sentiments are reflected by what businesses think 2012 will bring. A survey by the Bulgarian Industrial Association established that 71 percent of the 500 business managers interviewed expect a deepening crisis in 2012. A percentage point less, 70 percent, said the business climate in 2011 was worse than in 2010. The gloominess is exacerbated by worsening rates of overdue debt, continuing need for skilled labour, bad work ethics, falling sales and the view that the government's anti-crisis policies, if any, have been "unsuccessful."

Just 7 percent said they say "improvements" in 2011, while 50 percents aid their companies performance had deteriorated. A quarter said they had to restructure their debts, and 8e percent said money owed to them was in arrears.

One in three said they would reduce staff further in 2012.

So how does Boyko Borisov's government fare in light of the gloomy economic forecasts for 2012?

Interestingly, it continues to enjoy the support of 20-28 percent of those Bulgarians who are otherwise very unhappy with their economic plight.

Bulgarians tend to trust the army (29 percent) and the Bulgarian National Bank (25 percent). Approval for Tsvetan Tsvetanov's police has fallen by 10 percent in a year – probably the result of the numerous botched police operations that as a rule fail to produce any meaningful prosecutions. The courts and the judicial system continue to be hugely unpopular. Sadly for a young democracy such as Bulgaria, just 8 percent trust the parliamentary institution.

The absence of a credible political opposition and independent media, coupled with the increasing manifestation of a dangerous Russian-style concentration of political and economic power, means GERB is likely to continue to dominate Bulgarian political life in 2012.


    Commenting on www.vagabond.bg

    Vagabond Media Ltd requires you to submit a valid email to comment on www.vagabond.bg to secure that you are not a bot or a spammer. Learn more on how the company manages your personal information on our Privacy Policy. By filling the comment form you declare that you will not use www.vagabond.bg for the purpose of violating the laws of the Republic of Bulgaria. When commenting on www.vagabond.bg please observe some simple rules. You must avoid sexually explicit language and racist, vulgar, religiously intolerant or obscene comments aiming to insult Vagabond Media Ltd, other companies, countries, nationalities, confessions or authors of postings and/or other comments. Do not post spam. Write in English. Unsolicited commercial messages, obscene postings and personal attacks will be removed without notice. The comments will be moderated and may take some time to appear on www.vagabond.bg.

Add new comment

The content of this field is kept private and will not be shown publicly.

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.

Discover More

Six months after the Covid-19 pandemic forced the world into lockdowns and uncertainties, a fuller picture of its effect on the world economy is beginning to emerge. Bulgaria fared not too bad, according to recent statistical data.

Nowhere is the abyss between what Boyko Borisov's GERB says it is doing and what it in fact does so obvious than in the economy of what firmly remains the EU's poorest state.

In the third quarter of 2010 the average monthly income of an adult member of a family in Bulgaria decreased by 2.2 percent on a year earlier. At the moment it is 932 leva, or 466 euros, according to the National Statistical Institute.

The crisis was already a fact in Bulgaria at the beginning of 2009, but the owner of an accountancy firm in Gorna Oryahovitsa would deny it even more vehemently than then Prime Minister Sergey Stanishev.
Rays of hope have started to peep through the cloud-covered economic horizon – even in the new EU member states. Poland has managed to avoid going into recession.

At first, they stopped buying. Then it got worse - they started selling. Yes, it seems the British have deserted the Bulgarian property market and the Bulgarians are taking it very personally.
"The Bulgarian economy is stable." The words former Finance Minister Plamen Oresharski uttered in October 2008 seem more than just a little out of place a year later.

While last autumn the prevailing opinion of people in this country was that the economic crisis did not have a direct effect on them, their view is now completely different.

The commercial real estate market in Bulgaria is at a crossroads.
The "monster munch," as Londoners call the current credit crunch, in my view is running out steam. Everyone is growing tired of the pundits.
According to a saying very popular among Bulgarians in the past, "In his life, a man must do three things: raise a child, plant a tree and build a house for his family." Nowadays this way of thinking no longer reflects the urban lifestyle – the current rati
The year 2008 taught the world a bitter lesson – in economy terms, we're all in the same boat. No country is safe from the effects of a global crisis.