What's Happening in Black Sea? - July, 2015

Bulgaria

• Greek embassy in Sofia pointed out that Greece has already contributed significantly to Bulgarian economy. Greece, struggling with heavy crisis, has helped to provide 70.000 jobs in Bulgaria with a total investment worth € 2.5 billion in the past years.
• According to Bulgarian National Bank (BNB), foreign direct investments in Bulgaria between January – May reached to € 616.9 million which is 1.4% of its GDP. In the same period last year, it was only € 302.6 million. 
• STROM Ltd. is planning to invest in Plovdiv’s recent Rakovski Industrial Zone. Stayko Todorov, owner of STROM Ltd, announced the € 4.7 million worth investment plan with 20 people to employ, which will increase to 100-150 workers in some seasons. The main products of the plant will be sterilized gherkins, roasted and peeled red peppers (in jars and frozen) and various types of chutney.
• Ernst & Young (EY) expects a modest growth of Bulgarian economy in this and also next year. Country’s GDP decreased 0.6% in the second quarter and investments rose only 0.4%, both compared to the previous quarter. Key increase was in exports: EY lowered its forecast for the GDP growth in 2015 to 1.9% from 2.1%. Company also expects an average yearly growth of 3.4% for the period of 2017-2019.

Georgia

• Georgia’s newest power plant in, Gardabani 230-megawatt gas combined cycle plant, was completed by Turkish investors with a total worth $ 220 million. Country has already imports 80% of its energy from other countries. 
• Georgia’s real estate sector has been attracted by Chinese investors recently. Residential complex of Tbilisi Sea New City holding 2 million square meters is expected to be done by Hualin Group, a private Chinese company already spent $ 500 million in various sectors; from wood harvesting to mining. 
• By the way, China ranks as Georgia’s fourth largest trading partner: $ 823 million trade has been accomplished between two countries, which equals to 7.2% of Georgia’s total turnover of 11.4 billion. 
• According to Georgia’s National Statistics Department (GeoStat), the country’s foreign trade turnover decreased 13% to 3.76 billion in the first half of 2015. Country exported $ 1.08 billion, while the import was $ 3.68 billion which resulted in negative trade balance for the country. 
• GeoStat also announced the growth slow of Georgia’s economy for the period of January – May in 2015. Country’s GDP increased 2.5% this year while there was a %4.6 increase in the same period of last year.
• Giorgi Kvirikasvili, Georgia’s Economy Minister, mentioned Lari has gained its strength against the US dollar. National Bank of Georgia (NBG) arranged a new exchange rate as 1 USD equals to 2.2465 GEL, which was equal to 2.2471 in the previous set. 

Greece

• Greek banks finally started serving, after three weeks, although there is still a limit for withdrawal and transfers. Withdrawal limit has been set to 420 € per week, which was 60 € daily previously. Greek depositors have withdrawn nearly 40 billion euros from their bank accounts since December. 
• The decision of shutting down the Greek banks for a period resulted a great suffer for the Greece’s economy. Country lost € 3 billion since June 29. 
• According to European Commission (EC), Greek GDP has shrunk 26% since 2008. Commission expects another shrink of 4% this year, adding a forecast of no growth until 2017.

Romania

• Kärcher, German group investing in cleaning equipment production, will receive € 8 million state aid in order to finalize its investments in Bucharest, Romania. The investment is expected to create 313 jobs in the country.
• OMV Petrom, the largest oil and gas producer in South-Eastern Europe plans to have a € 42 million investment program in Galati county, in eastern Romania. With the new investment, the company will unlock additional oil reserves.
• Swedish IKEA Group agreed to buy 33,600 hectares forests in Romania for new productions. The company has already employed 470 people in Romania.
• Victor Ponta, Romania’s Prime Minister, was charged with forging documents and money laundering, which damages the country’s reputation in the global arena. 
• Romania successfully helped its GDP by increasing FDIs 18% in the first five months of 2015, compared to same period in last year. Even though FDIs in May was the lowest in the year, country reached to € 1.29 billion at the end of January-May period. 
• With the help of FDIs, Romania’s GDP rose by 4.1% in the first quarter of 2015, according to National Statistics Institute.
• National Prognosis Committee (CNP) expects the country’s economy to grow by 3.3%, while Moody’s Investors Service announces an average growth of 3.0% in the following years.

Russia

• Russia transferred $ 760 million loan to Belarus, confirmed by Belarusian Finance Ministry. Russia has previously loaned another $ 110 million to the country in 2010. 
• Due to the drops in the oil prices and Western sanctions, Russia may fire 110.000 ministry officials. IMF declared that the country’s economy shrunk by 2.2% in the first quarter of 2015, while the expectation for 2015 is 3.8% decrease. 
• According to the Russian Economy Ministry, capital outflows from the country may get deeper. Russia may lose $90 billion in 2015 due to heavy drops in the oil prices. 
• Chinese Ministry of Commerce mentioned that China’s direct investments in Russia decreased by 25% in the first half of 2015. 
• Due to crisis in the country, more and more Russians are getting into the poverty. Almost 23 million Russians live on less than 169 $ which is set as official poverty line.
• Yuzhny port plans to have $ 500 million worth capital investment for 2015-2019 peroid in order to increase the operating effectiveness for loading and unloading or ships with a carrying capacity of 175,000-200,000 tones.
• Saudi Arabia’s Public Investment Fund (PIF) agreed to invest $ 10 billion over the next five years in Russia. 
• Fitch kept Russia’s rating at the level of “BBB-“ with a negative outlook. Fitch also expects a decrease by 4% in 2015. 

Turkey

• Peninsula Hotels, Hong Kong based hotel giant plans to enter Turkish market with a $ 300 million worth investment. Project called “Salipazari” will be based in Istanbul. 
• It is rumored that ING might acquire HSBC’s operations in Turkey. HSBC made $155 million loss in 2014.
• The World Bank lowered its expectation for Turkish economy. The bank announced 3% growth forecast for 2015 while 3.5% growth is estimated for both 2016 and 2017, which were previously 3.9% and 3.7%, respectively. 

Ukraine

• Ukrainian Finance Ministry declared to want $ 1 billion of US guarantees by the end of the year in order to stabilize the economy.
• Artem Sheyalev, Ukraine’s Deputy Finance Minister, mentioned that Ukraine made a $ 120 million coupon payment on its Eurobonds to avoid technical default. With this payment, country tries to convince creditors to invest in Ukraine. 
• European Investment Bank (EIB) lends Ukraine € 400 million for municipal infrastructure restoration, development projects. 
• According to Ukrainian Finance Ministry, country parliament has passed the bill to take another $ 3 billion bailout from IMF. Country has used a total of $ 17.5 billion from IMF.
• Naftogaz, Ukrainian state energy firm, plans to receive $ 300 million trade finance loan from the European Bank for Reconstruction and Development (EBRD) in order to create a fund to finance the purchase, transport and storage of gas from European market.