Transcript No Slide Title
ROMANIA AND BULGARIA OVERVIEW
Mr. Michael Essex Manager, Emerging Markets Unit Doing Business with the New Europeans 31 May, 2006 01/05/2020 UKTI - Trade Development Presentation 1
ROMANIA
ROMANIA
UA
• Iasi
H
• Arad • Timisoara • Cluj • Targu-
Mures
• Bacau • Sibiu • Brasov
MD
• Galati
SE
•
Bucharest
• Constanta
BG
ROMANIA
the second largest market in the region the 7th largest country in the Enlarged Europe the UK is its 4th largest import-export market the UK is its 5th largest foreign investor in 2004 the fastest growing economy in Europe in 2004: 8.3%
ROMANIA
Area: Population: Capital: Administration: 237.500 km² 21.7 M, 7.5 M households Bucharest (Bucuresti), 2 M people 41 counties, 7 cities with 300,000 Time: GMT + 2 Hours Currency: Denomination; 1 New Lei (RON), 1 £ = 51 RON 1 €= 36 RON, 1 $= 29 RON Religion: 86% Romanian Orthodox 10% Catholic , 4% Others Nationalities: Romanian 89.5%, Hungarian 6.6%, Roma 2.5%, Ukrainian 0.3%, German 0.3%, Russian 0.2%, Turkish 0.2%, other 0.4% (2002 census)
Romania - political status
General Elections in December 2004 brought a broad alliance of social-democratic and liberal parties. Opposition: in disarray.
Main focus of Cabinet: preparations for EU accession in January 2007: only reason for unity.
Business friendly President and Cabinet team.
Vocal support for the "Bucharest -London Washington axis".
ROMANIA
ECONOMIC STATUS
Government & National Bank prudent fiscal and economic policies GDP annual growth 2001: 4.5; 2004: 8.3% 2005: 5.2% INFLATION: 2003: 15.3%, 2004: 11.9%, single digit by end-2005: 7% and dropping BUDGET DEFICIT: 2004: approx 0.9% of GDP2005 estimate: 0.7% of GDP FDI over $3bn
GDP Growth - yr/yr %
10.0
8.0
6.0
4.0
2.0
3.9
0.0
-2.0
-4.0
-6.0
-8.0
-10.0
1994 7.2
3.9
1996 -6.6
-7.3
1998 -3.5
1.5
2000 5.3 4.9 4.9
2002 8.3
2004 4.7
5.5
2006
Yearly Inflation Rate - yr/yr %
200 180 160 140 120 100 80 60 40 20 0 61.7
27.8
56.9
151.4
59 54.9
40.7
25 18 14 11.9
8.6
5.7
ROMANIA
ECONOMIC STATUS
Economic snapshots - FY2005 & Q1 2006:
New Car sales up 50%.
GDP growth Q1 2006: 6.5%.
Real salary growth: 11.5% (2005/2004) Consumer loans growth: 27% Mortgage and housing loans growth: 55% Banking assets growth: 33.1% Banking sector profit rates: 16.9% on capital (source: National Bank of Romania)
ROMANIA
Business environment
Labour
Unemployment: 6.3% in March 2006.
Net average monthly wage March 2006: €240 (828 RON) Employers’ taxes: 32.5 - 36% of gross payroll Flat income tax: 16% on salary income and others.
Skilled labour mainly available in industrial and services sector.
Foreign language skills are strong.
ROMANIA
Business environment
Infrastructure
Transport: Extensive railway system: 2 new EU corridors Roads and bridges: average condition, flood affected areas; 2 new highways to Europe Highways: only 200 km at western standards.
Water supply: 40% of population rely on wells (EU, EBRD and World Bank funding available).
Telecommunications: nationwide fixed and mobile networks, including 3G (Vodafone).
ROMANIA
Business environment
Property Market
The office space property market is booming, while land availability is decreasing.
International players are setting the standards.
Class-A office space: Sale price: €1,550/ sqm, Rents: €16/ sqm/ month.
Retail space rents: €10-100/ sqm/ month.
Apartment rents: €400-5000/ month.
Residential villas: €1500-7000/ month.
Risks
Judicial system: ineffective, substantial reform underway Corruption: Romania gets a rating of 3.0 on a scale of 0 (highly corrupt) to 10 (highly clean)
ROMANIA
AID-FUNDED BUSINESS
EU funding: PHARE, ISPA, SAPARD, SAMTID Pre-accession: 2003-2006: €3.31 billion Post-accession: 2007-2013: €29 billion World Bank (IBRD): 1991-2004: $3.8 billion Total commitments for 2005: $636 million Total proposed for 2006: $1.1 billion EBRD Total portfolio 1992-2005: €2.7 billion Total commitments for 2005: €276 million
Trade with UK, £ millions
900 800 700 600 500 400 300 200 100 0 1997 790 606 644 837 1998 1999 2000 UK Exports 2001 2002 2003 UK Imports 2004 2005
Top Sectors 2005 UK-Romania trade
UK EXPORTS
Textiles and accessories Other Transport equipment Telecommunications Electrical machinery Office Machinery Pharmaceutical products Road vehicles Specialised industrial machinery General industrial machinery
UK IMPORTS
Articles of apparel Electrical machinery Furniture Footwear Telecommunications Power generating machinery Road vehicles General industrial machinery
ROMANIA
UK Investment
2200 UK companies registered UK investment: € 3.5 billion Vodafone, GlaxoSmithKline, Coats, BPB Rigips, AVIVA, UNILEVER, Gallaher, Alison Hayes Marks & Spencer, The Body Shop, Mothercare, Boots Debenhams, Jaguar, Bentley, Aston Martin, Mini Cooper
ROMANIA
Sectors of activity
Rail Water Financial & Legal Services Construction Agriculture Healthcare Oil & Gas Food & Drink Environment Creative industries Film & Cultural Heritage Power Airports Engineering Education & Training Security
UK Trade & Investment office
British Embassy Bucharest Trade Development Section 24, Jules Michelet Street 010463 Bucharest, Romania Tel: +40 21 201 7200 Fax: +40 21 201 7311 Email: [email protected]
Websites: www.UKTradeInvest.gov.uk
www.BritishEmbassy.gov.uk/Romania 01/05/2020 UKTI - Trade Development Presentation 20
BULGARIA
BULGARIA
BULGARIA
A country in Central-Eastern Europe, having Area: 111,994 km² Population: Capital: Administration: 7.9 M Sofia, 1 M people 278 municipalities and 28 regions Time: GMT + 2 Hours Currency: Leva (BGN): £1=2.86 BGN. €1= 1.96 BGN. $1=1.64 BGN Religion: Nationalities: 83% Orthodox, 13% Muslim , 4% Catholic, Protestant, Others Bulgarian 86%, Turkish 9.4%, Roma 4.6%
BULGARIA
- political status
Politically stable, with a democratic government since the fall of communism in 1989 Parliamentary democracy with both a president and a prime minister Coalition: coalition for Bulgaria (led by BSP), national movement Simeon II (centre right), movement for rights and freedoms (representing the Turkish minority). Continue reformist agenda of previous government, very committed to EU membership. Next presidential elections due in 2006.
President: Georgi Parvanov Prime minister: Sergei Stanislev (BSP) Deputy PM and FM: Ivailo Kalfin
BULGARIA
ECONOMIC STATUS
Seven years of stable, sustainable growth GDP annual growth 2002: 4.9; 2003: 4.5% 2004: 5.6% estimate for 2005: under 4% INFLATION: 2004: 6.1% BUDGET DEFICIT:2004: -1.45bn Euro or 7.4% of GDP FDI 2005: US$ 2324.2 m
GDP Growth - yr/yr %
6.0
4.0
2.0
0.0
1.4
-2.0
-4.0
-6.0
-8.0
-10.0
1994 2.9
1996 3.5
2.4
5.8 4.5 4.9 4.5 5.6
1998 2000 2002 2004 5.2
Yearly Inflation Rate - yr/yr %
600 500 400 300 200 100 0
FDI in share capital per country: $ million, 1990- end 2004: $13.7 bn
BULGARIA
Business environment
Labour
Unemployment: 6.5% in September 2005.
Gross average monthly wage: €250.
Employers’ taxes: 32.5 - 36% of gross payroll costs.
Flat income tax: 16% on salary income and others.
Skilled labour mainly available in industrial and services sector.
Foreign language skills are strong.
BULGARIA
Business environment
Excellent climate, natural scenery, food and hospitality Flat corporate Income tax rate: 15%, 12% 2006 Industrial goods traded duty free between Bulgaria and EU, EFTA, CEFTA, Turkey Vat exemption on equipment imports for investment projects over €5m
BULGARIA
Business environment
Property Market
Massive growth in interest Many smaller investors Purchase Prices have risen rapidly
BULGARIA Risks
Judicial system: ineffective, substantial reform required Organised crime.
Corruption: Bulgaria gets a rating of 4.0 on a scale of 0 (highly corrupt) to 10 (highly clean)
BULGARIA
EU-FUNDED BUSINESS
EU office, Sofia:
www.europa.bg
General on enlargement:
http://europa.eu.int/comm/enlargement
Projects: EC delegation:
http://europa.bg
Tender opportunities: http://www.europa.eu.int/comm/europeaid/ ISPA – EC:
http://europa.eu.int/comm/regional_policy/fu nds/ispa/ispa_en.htm
Trade with UK, £ millions
250 200 150 100 50 0 1995 1996 1997 1998 UK Exports 1999 2000 2001 2002 2003 Bulgarian Exports 2004 2005
Top Sectors 2005 UK-Bulgaria trade
UK EXPORTS
Medicinal/pharmaceutical products Telecommunications Office machines & ADP equipment Electrical machinery, apparatus etc Textile yarn, fabrics, etc Specialised industrial machinery Beverages General industrial machinery Road vehicles Manufacture of metal nes
UK IMPORTS
Articles of apparel & clothing acc.
Furniture incl. Bedding, mattresses Iron and steel Telecommunications Electrical machinery, apparatus etc Non-metallic mineral manufactures Manufacture of metals nes Non-ferrous metals Textile yarn, fabrics, etc Beverages
Trade Development Section
Sectors of activity
Water Education & Training Financial & Legal Services Construction Environment Power Telecommunications Agriculture Railways Sports and Leisure goods (golf) 01/05/2020 UKTI - Trade Development Presentation 36
UK Trade & Investment office
British Embassy Sofia Trade Development Section British Embassy 9 Moskovska Street Sofia Tel: + (359 2) 933 9222 Fax: + (359 2) 9339 279 Email: [email protected]
Websites: www.UKTradeInvest.gov.uk
01/05/2020 UKTI - Trade Development Presentation 37
THANK YOU
UK Trade & Investment Kingsgate House 66-74 Victoria Street London SW1E 6SW.
Website: www.uktradeinvest.gov.uk
UK Trade & Investment is the Government Department that supports both companies in the UK trading internationally and overseas enterprises seeking to locate in the UK 01/05/2020 UKTI - Trade Development Presentation 38