SOFIA (Bulgaria), November 4 (SeeNews) – Sofia-based consultants Industry Watch believe Bulgaria’s business services sector may lose 100,000 jobs next year if the economic downturn lasts on a global scale, local Dnevnik daily reported.
Construction industry and export-oriented sectors will be adversely affected. Sectors with great elasticity of consumer demand such as production of or trade in luxury goods will also suffer losses.
Bulgaria, however, can benefit from some specific local advantages, according to a Industry Watch report presented at the Fourth annual meeting of Bulgarian business and government officials on Tuesday, Dnevnik reported in its online version.
“Bulgaria has lower average income and productivity rates, which combined with relevant reforms aimed at improving the business climate, can attract significant foreign investments even in times of turmoil for the developed economies and fuel faster growth”, the report said.
Even if the Bulgarian economy stabilizes in 2010, the construction sector and the credit market will hardly reach the pre-crisis growth rates any time soon. Industry Watch expects that even under the most favourable circumstances, heavily indebted companies will collapse.
Under a pessimistic scenario Bulgaria can suffer from lack of direct foreign investments and liquidity. Pessimistic scenario means failing of the fiscal policies around the world, a rise in bad loans and fragmentation of markets.
According to Industry Watch, a stagflation in major economies can be dangerous for Bulgaria because it will lift the prices of natural gas and oil, of which the Balkan country is heavily dependent.