BULGARIAN ECONOMIC TOP NEWS DIGESTWEEKLY REPORT ( 5 - 13 May 2011 ) Sections / headline briefs : MACROECONOMY : Ø Raiffeisen Research : Bulgaria ' s Domestic Market Shows Fragile Signals of Recovery , but Feeling of Insecurity LingersØ Industrial production grows 6 . 1 % y / y in March 2011 Ø Exports growth speeds in March 2011 Ø Bulgaria ' s foreign trade turnover records EUR 47 m surplus in Q 1 2011 INVESTMENTS : Ø Bulgaria Turkey Plan Sofia - Edirne Bullet Train Ø Bulgaria sees hi - tech as lure for foreign investorsØ Investments in Energy Generation from Biomass Expected to Exceed 1 , 000 Million Leva in Next Three Years COMPANIES AND INDUSTRIES : Ø Sales revenues of drugmaker Sopharma rise 15 % y / y in Jan - Apr 2011 Ø Bulgarian metal ore exports up 208 % in MarchØ Bulgaria ' s Interservice Uzunovi Plans To Build 32 Mln Euro Urban Solar ParkØ Dundee Precious Metals Borrows $ 14 . 5 Mln for Bulgarian Mine , Mill ExpansionØ Construction output falls by 18 . 3 % y / y in March 2011 Ø M - Network to invest in GPON network , to cover up to 60 % of population by 2014 Ø Bulgaria ' s new vehicle sales increase 24 % Y / Y in Jan - Apr 2011 Ø Lidl Bulgaria Adds Three Stores to Network Articles : MACROECONOMY : Raiffeisen Research : Bulgaria ' s Domestic Market Shows Fragile Signals of Recovery , but Feeling of Insecurity LingersThere are fragile signals for recovery of Bulgaria ' s domestic market , but the feeling of insecurity remains , according to a monthly economic review of Raiffeisen Research released at the end of April . A number of economic sectors indicate positive development , while the state of many others continues to be determined by momentum and insecurity , the bank analysts argue . " In the first two months of 2011 the rate of growth of industrial production accelerated to double - digit values . Industrial turnover advanced considerably in both the external and the domestic market , " the analysis reads . " Construction production continued contracting . Meanwhile , for the first time since the end of 2007 , in the first quarter of 2011 a year - on - year increase of the area , for which building permits were issued , was recorded . " " Domestic demand showed signs of improvement , as for January - February trade turnover realized a positive real growth rate ( 3 . 2 per cent year - on - year ) . In March inflation accelerated to 5 . 6 per cent year - on - year and on a monthly basis it was 0 . 6 per cent . The deceleration compared to February was due to seasonal factors and a certain normalization of the prices on the international markets of foods . " " Unemployment decreased by almost 10 , 000 people and reached 9 . 52 per cent . Nevertheless , its level remains high . A more pronounced recovery of the labour market could be expected in the end of this year and the beginning of next year , " the analysts think . " The consolidated state budget accounted a surplus of 8 . 6 million leva in March as a result of higher budget revenues and lower expenditures . " " Bad and restructured loans to companies declined by 49 million leva in March . The same indicator for consumer loans increased by 24 million leva , and for mortgage loans - by 59 million leva . " " The saving behaviour of households remained almost unaltered - in March their deposits increased by 212 million leva . This indirectly affirms the slow improvement of consumer confidence , " analysts believe . Raiffeisenbank ( Bulgaria ) Chief Economist Kaloyan Ganev commented that the domestic market recovery , which is still uneven and benefits only part of the economy , will slowly continue to gain speed in the coming months . The positive influence of export , however , will gradually wane considering the high starting level last year . According to Ganev , a clear indication of sustained recovery cannot be expected before the better performance of business extends to the labour market as well . Industrial production grows 6 . 1 % y / y in March 2011 The industrial production index increased by real 6 . 1 % y / y in March , decelerating from revised 15 . 4 % y / y in February and 10 . 1 % y / y in January , preliminary data of the statistical institute showed . The slowdown was due to a significant deceleration of the growth rates of the manufacturing to 6 . 8 % y / y from 22 . 5 % y / y a month earlier . The manufacturing of food , beverages and tobacco declined in March after posting high growth rates in February and the increase of the textile and clothing as well as the chemical products slowed significantly . The expansion of the utilities sector also slowed to 5 . 5 % y / y in March from 6 % y / y in February while the extraction industries turned to growth of 3 . 3 % y / y as compared to 1 . 4 % y / y contraction in February . The number of branches , which posted annual growths in March fell to 14 ( out of 27 ) as compared to 20 both in February and in January . In seasonally - adjusted terms , the industrial production added 0 . 1 % m / m while working - day - adjusted data showed an increase of 5 . 1 % y / y . The industrial turnover index increased by 29 % y / y , indicating a further reduction in the inventories accumulated in the previous months . Exports and domestic turnover went up by 57 . 9 % y / y and 14 . 2 % y / y , respectively . Exports growth speeds in March 2011 Exports increased by 49 . 9 % y / y to BGN 3 . 3 bn ( EUR 1 . 7 bn ) in March , according to preliminary data of the statistical office . The growth rate accelerated from revised 46 . 6 % y / y in February . In March , the exports growth to EU countries ( 56 . 1 % y / y ) was faster than those to non - EU member states ( 41 % y / y ) . At the same time , total imports expansion continued slowing to 19 . 7 % y / y from 36 . 1 % y / y in February due to lower purchases from both EU and non - EU countries . The foreign trade balance remained negative at BGN 33 . 2 mn in March but narrowed both in monthly ( from BGN 60 . 9 mn in February ) and in annual comparison ( from BGN 584 . 3 mn in March 2010 ) . The trade with the EU countries remained on surplus in March and the gap with non - EU countries almost halved . Bulgaria ' s foreign trade turnover records EUR 47 m surplus in Q 1 2011 Bulgaria ' s foreign trade turnover ended up in a surplus of BGN 92 million ( USD 67 . 6 m / EUR 47 m ) in the first quarter of 2011 compared with a deficit of BGN 1 . 1 billion in the corresponding period of the previous year , National Statistics Institute ( NSI ) data shows . Exports soared by 55 . 6 % on the year to BGN 9 . 304 billion in the period , while imports stood at BGN 9 . 212 billion , up 29 . 9 %. The exports were mainly driven by stronger sales of fuels , raw materials of the mining industry and specific products derived from raw materials . The highest increase , of 136 %, was registered in the exports of fuels , which totalled BGN 1 . 05 billion in money terms . INVESTMENTS : Bulgaria Turkey Plan Sofia - Edirne Bullet TrainBulgaria and Turkey are planning the launch of a bullet train between Sofia andEdirne , according to Suleyman Karaman , Director General and Chairman of the Board of the Turkish State Railways . Karaman told the Bulgarian National Radio , BNR , transport ministers of the two countries recently held talks on the project , saying Turkey is ready with the project and is waiting for the Bulgarian side . " Bulgarians are applying effort according to their possibilities . We insist on the realization of the project ASAP , because the high - speed train will facilitate transport between Turkey and Europe , " the CEO says . Karaman explained the deadline is estimated somewhere in the next five years , pointing out the bullet train launch between Edirne and Istanbul is coming in the very near future , by the end of 2011 , with two thirds of the 280 - km railroadalready finished . The railroad will be used for both passenger and cargo trains . It is part of Turkey ' s ambitious project to have a direct railway connection between Central Europe , Turkey and the Middle East . Bulgaria sees hi - tech as lure for foreign investorsBulgaria is pinning its hopes on sectors with high value - added , such as hi - tech , pharmaceuticals and argiculture , to lure foreign investment back into the country , the government revealed Tuesday . Foreign direct investment in Bulgaria has fallen sharply in the wake of the global economic and financial crisis , dwindling to 1 . 64 billion euros ( $ 2 . 6 billion ) or just 5 . 0 percent of gross domestic product ( GDP ) in 2010 from 6 . 55 billion euros or 19 . 2 percent of GDP in 2008 . In the past , much of that foreign investment has been channelled into sectors with relatively low value - added , such as construction , real estate , trade and finance , Economy Minister Traicho Traikov said . But in a new strategy paper revealed on Tuesday , Traikov said the government hoped to make sectors with higher value - added more attractive to foreign investors in order to turn the tide , as other countries in the region , such Poland , the Czech Republic and Hungary have already done . " Foreign investment should recover in 2011 and that will give us a chance to reposition ourselves in the right direction , " Traikov said . The minister said there was already a noticeable shift in investors ' focus to sectors such as car parts , pharmaceuticals and electric appliances . The government hoped to help further boost that trend and encourage more investment in sectors such as electronics , information and communication technologies , outsourcing , farming , food industry , transport , healthcare , balneology , pharmacy and chemicals , said the head of the Invest Bulgaria Agency , Borislav Stefanov . Currently , these sectors contribute only around 30 percent to Bulgarian GDP . In a bid to boost that ratio , the government would help foreign investors by financing infrastructure and personnel training , Stefanov said . Bulgaria stands to profit from the fact that " investors see it as a gateway to the European Union , " AT Kerney consultancy expert Michael Weiss said . He urged the government to make the most of Bulgaria ' s geographical position on the crossroads between Asia and Europe . Investments in Energy Generation from Biomass Expected to Exceed 1 , 000 Million Leva in Next Three YearsInvestments in the production of heating energy , power and biogas from biomass can exceed 1 , 000 million leva in the next three years , Agriculture and Food Minister Miroslav Naydenov said Thursday , opening a conference on " Investment in Biomass " hosted by Sofia . Naydenov said that until now the biomass had not been a priority of the Agriculture and Food Ministry , so that the competitive advantage provided to other sources of energy led to the current situation " where the Bulgarian agricultural land is burgeoning with photovoltaic and other such facilities ". Naydenov said the production of biomass is a big niche which has so far stood unused . " This changes with the latest amendments to the Renewable Energy Sources Act , " he said . The more than 100 projects for biomass facilities in Bulgaria are expected to create more than 1 , 000 jobs , he said . Deputy Chairman of the Agriculture and Forests Committee in Parliament , Emil Dimitrov , said that in its previous shape the Renewable Energy Sources Act created a serious imbalance to the detriment of biomass . Dimitrov said that utilizing biomass is extremely important because , together with all the other benefits , it will create more than 30 , 000 jobs in wooded areas and also in the most depopulated regions . Deputy Agriculture and Food Minister Georgi Kostov said that the total forest stock in Bulgaria as at the end of 2010 was 643 million cu m of standing trees . The average annual forest growth is 14 . 4 million cu m . Timber produced in Bulgaria in 2010 stood at 5 . 6 million cu m . COMPANIES AND INDUSTRIES : Sales revenues of drugmaker Sopharma rise 15 % y / y in Jan - Apr 2011 The sales revenue of leading local pharmaceutical producer Sopharma increased by 15 % y / y in Jan - Apr , the company said in a note , posted on the website of the local stock exchange . Export sales have expanded by 24 % y / y since the beginning of the year while those on the domestic market have declined by 3 %. In April only , total sales went up by 20 % y / y , including 34 % exports growth and 5 % domestic market decline in annual terms . The net non - consolidated profit Sopharma rose by 3 % y / y to BGN 13 . 2 mn ( EUR 6 . 7 mn ) in Q 1 on sales revenues growth of 13 . 5 % y / y to BGN 53 . 7 mn as export sales expanded by 21 % y / y while those on the domestic market declined by 2 %. The company plans to raise sales by some 12 % in 2011 , which is about the same expansion like in the previous two years . Bulgarian metal ore exports up 208 % in MarchExports of metal ores from Bulgaria rose by 208 per cent year - on - year in March 2011 , according to data from the National Statistics Institute ( NSI ) . The major ores products exported from Bulgaria are copper , zinc and lead . Leading companies in the sector are Asarel Medet , Gorubso Madan , Aurubis Bulgaria ( former MDK Pirdop ) KCM Plovdiv , Kardjali OCK , and Chelopech Mining , the report said . Additionally , energy exports soared by 148 per cent annually , while total industrial exports increased by 58 per cent year - on - year , Investor . bg reported . In February , industrial exports increased by 40 per cent on an annual basis and in January by 66 per cent . Total exports increased by 47 per cent in February and a by a record 72 per cent in January 2011 . Strong growth in exports during March was also observed in other sectors such as food products ( 71 per cent ) , tobacco ( 76 per cent ) , paper and cardboard ( 57 per cent ) , basic metals ( 88 per cent ) , as well as computer and communication equipment , and electronic and optical products ( 54 per cent ) . Pharmaceutical products also registered an increase of exports of 20 per cent , Investor reported . Bulgaria ' s Interservice Uzunovi Plans To Build 32 Mln Euro Urban Solar Park Bulgarian trading company Interservice Uzunovi plans to build an urban solar park worth 32 million euro ( $ 46 . 1 million ) , local media reported on Tuesday . The project calls for the mounting of solar panels on parking lots and rooftops , Pari business daily quoted the company ' s executive director Krasimir Uzunov as saying . He did not elaborate on the future park ' s location and installed capacity . We plan to build the whole project by the end of June 2012 , " Uzunov said . Pari said Interservice Uzunovi has recently completed a 5 . 0 megawatt - peak ( MWp ) photovoltaic park worth 15 million euro , including 12 million euro invested in equipment . The park is located in the village of Ravna Gora , near the Black Sea city of Varna . Varna - based Interservice Uzunovi , set up in 1990 , has a fixed capital of 9 . 0 million euro and long - term assets worth 27 million euro . Dundee Precious Metals Borrows $ 14 . 5 Mln for Bulgarian Mine , Mill ExpansionCanada ' s Dundee Precious Metals said on Tuesday it and its wholly - owned Bulgarian subsidiary Chelopech Mining signed a $ 14 . 5 million ( 10 . 1 million euro ) loan agreement with Raiffeisenbank Bulgaria . The proceeds from this loan will be used to further assist in the financing of the Chelopech $ 150 million mine and mill expansion in Bulgaria , which is currently underway and will double mine and mill output to 2 . 0 million tonnes of ore per year , the Canadian company said in a statement . " This completes $ 81 . 25 million in long term debt financing that was originally anticipated when we started the debt raising process , " Dundee Precious Metals ( DPM ) President and CEO Jonathan Goodman said in the statement . The loan agreement with Raiffeisenbank concludes $ 81 . 25 million in long - term debt financing arrangements for the Chelopech expansion , which started with $ 66 . 75 million financing with the European Bank for Reconstruction and Development and Bulgaria ' s Unicredit Bulbank , agreed last year . The Raiffeisenbank loan , which is guaranteed by DPM and secured by a share pledge , is repayable in 10 equal semi - annual instalments , starting in June 2013 and carries an interest of LIBOR plus 3 . 25 % until project completion and LIBOR plus 2 . 80 % thereafter . " The Raiffeisenbank loans are subject to a cash sweep which obligates Chelopech to prepay up to an aggregate amount of 30 % of Chelopech surplus cash flow rateably to Raiffeisenbank and Unicredit . This mandatory prepayment is limited to the equivalent of two years of Raiffeisenbank and Unicredit loan repayment , " the statement said . Chelopech Mining produces copper - gold - silver concentrate at the mine located in the village of Chelopech some 70 kilometres east of Bulgaria ' s capital Sofia . Dundee Precious Metals ( www . dundeeprecious . com ) is engaged in the acquisition , exploration , development and mining of precious metals . In addition to the Chelopech project , it recently got 30 - year concession on a gold mine near Krumovgrad , in southern Bulgaria . It has a smelter in Namibia and also owns a 95 % interest in the Kapan Mine in Armenia . Since 2004 , it has been engaged in mineral exploration activities in Serbia . Construction output falls by 18 . 3 % y / y in March 2011 Construction output declined by 18 . 3 % y / y in March , according to preliminary data of the statistical office . The contraction continued accelerating from revised 13 . 1 % y / y in February and 12 . 2 % y / y in January . The decline in construction of buildings sped to 13 . 9 % y / y after narrowing in the past several months . Civil engineering works went down by 24 . 2 % y / y in March as compared to 18 . 4 % y / y in February , 12 . 5 % y / y in January and 9 . 2 % y / y in December . In seasonally adjusted and working - days - adjusted terms , total construction output contracted by 3 . 1 % m / m and 19 . 1 % y / y , respectively . M - Network to invest in GPON network , to cover up to 60 % of population by 2014 M - Network , the subsidiary of the country ’ s largest wireless operator MobilTel running the two newly - acquired local Internet service and cable TV providers Spectrum Net and Megalan Network , plans to invest in the construction of Gigabit Passive Optic Network ( GPON network ) in more than ten years , Dnevnik Daily informed quoting M - Network CEO Nikolay Kichev . The company will launch the network on May 16 , 2011 in the capital city of Sofia . It plans to extend the network to Plovdiv , Varna and Burgas by the end of the year and then to Stara Zagora and Shumen , but may also add other cities . The GPON network of the company is to cover 50 - 60 % of the population by 2014 . M - Network will offer through the GPON network digital TV , landline telecom and internet services . Also , Kichev said that M - Network may acquire other internet providers meanwhile , according to Standartnews . Bulgaria ' s new vehicle sales increase 24 % Y / Y in Jan - Apr 2011 Sales of new motor vehicles in Bulgaria rose by 24 % year - on - year in the first four months of 2011 , figures of the Association of Car Manufacturers and Authorised Representatives ( ACM ) show . Bulgarians purchased 6 , 911 motor vehicles in the January - April period , up from 5 , 560 in the corresponding period of 2010 . A total 2 , 023 motor vehicles were bought in April alone , emerging as the best - selling month so far this year . According to Ivan Antrov , brand manager at Toyota Balkans , the market revival was mainly driven by the more advantageous deal terms , favourable leasing offers and preferential terms for financing the purchases . Sales of passenger cars and light commercial vehicles went up by 22 % to 6 , 496 units in the four - month period , accounting for the bulk of the sales , while sales of lorries soared 133 % to 412 . The number of new buses bought in the country , however , slumped to four from 31 in 2010 . The motorcycles segment also registered a slight decline in the period , with deals totalling 72 compared with 44 a year earlier . Volkswagen remained the most popular brand with 774 deals and a market share of 11 . 92 %, followed by Ford with 610 and a share of 9 . 92 %. Lidl Bulgaria Adds Three Stores to NetworkDiscount retailer Lidl Bulgaria on Thursday added three supermarkets to its network , raising its store count to 40 , it said . The new supermarkets are located in the towns of Sevlievo , Lukovit and Pavlikeni , in northern part of the country , Lidl Bulgaria , part of German group Lidl , said in a statement . With the latest expansion , Lidl Bulgaria operates in 31 towns across the country of 7 . 3 million people . Lidl Bulgaria began operations in November of last year . Lidl group runs over 9 , 000 supermarkets in 25 European countries . Reported by : Georgi IlievKOTRA SofiaKorea Trade - Investment Promotion AgencyCommercial Section of the Embassy of the Republic of Korea