The number of bankrupt companies in Bulgaria has grown by nearly 40% in 2013. The number of the ones which experience financial difficulties grew by 230% since the beginning of 2014. The liabilities of the five biggest bankrupt companies amount to some EUR 210 million. Companies from the fuel trade sector went bankrupt for the first time. However, some real estate companies stabilized. The only sectors without any problems whatsoever are the pharmaceutical industry, the IT sector and the telecommunications field, shows a report of Coface international company about Central and Eastern Europe.

The research covers thirteen countries. Bulgaria tops the ranking with highest increase of bankrupt companies, followed by the Czech Republic with 32% - that country tops the ranking regarding highest number of bankrupt firms in the construction sector. In Croatia only 5% of all companies went bankrupt. Representatives from Coface comment that even if the Eurozone recovers to some extent, the result will be felt in Bulgaria later on. The main prerequisite for a future economic recovery is linked with foreseeable and transparent business environment. Data released from the Bulgarian statistics is not very promising, because it shows an economic growth below the average EU level. Moreover, the political and the economic atmosphere in Bulgaria are quite turbulent. Although the Bulgarian government forecasted a GDP (gross domestic product) growth of 2.1%, it will be much lower, Coface contends. Traditionally, highest number of bankruptcies was registered in the retail trade and wholesale sector. Although fuel trade was regarded as one of the most stable sectors of the economy, some companies from the field have already declared bankruptcies. The number of bankrupt food dealers and traders of construction materials is highest. With regard to the ventures (the risky sectors), the biggest number of bankrupt companies operate in the agriculture field, mainly grain producers. The number of bankrupt real estate agents who topped the ranking over the past years has dwindled significantly. It means that the weak players have already dropped out of this business. There are no bankrupt firms from the IT field, the telecommunications sector and the pharmaceutical industry. On the contrary, these companies have been developing quite well. The outsourcing business has become more popular and the number of companies registered to do this type of business is on the rise. The electricity, gas and the water supply companies are also quite sound, provided the state does not alter the regulatory regimes. Unlike in other Central and Eastern European Countries, Coface prognosticates a very weak economic growth in Bulgaria, because of the country’s low local consumption, the limited number of bank loans and shrinking exports. This could change by end 2014, provided Bulgaria boosts the EU funds’ absorption.

English version: Kostadin Atanasov