site.btaSurveys Reveals Expectations for Increasing Energy Prices, Fiscal and Regulatory Burden among Majority of Bulgarian Businesses

Sofia, December 18 (BTA) - A survey by the Bulgarian Industrial Association (BIA) reveals expectations among the majority of businesses in this country for growing prices of energy and raw materials, and increasing fiscal and regulatory burden in 2018. It was the traditional year-end survey of BIA among its members asking for their assessment of the outgoing year and expectations for the business climate, investments and jobs in the coming year, BIA deputy chairman Kamen Kolev said at a news conference.

He said that beginning in July, many BIA members started receiving offers from their suppliers for an increase of electricity prices between 15 and 30 per cent. The companies were told that they can either accept the increase as of the new year or consider the offer as a one-month notice of termination of the electricity supply contract. "The price of 70-75 leva/MWh that the regulator expected, has soared above 100 leva," said Kolev.

He said that businesses are aware that the price of electricity will only go up but their concern is that this is coming too soon and as a shock. The concerns are strongest among energy-intensive businesses.

The survey also found that 41 per cent of pollsters expect the national economy to continue growing. Wages will grow as well, driven mostly by the shortage of labour.

Kolev pointed out that nearly 50 per cent of EU funding for the new programming period has been contracted and 14 per cent is paid out. Next year will be of key importance for the absorption of EU funding and the BIA urges its members to be more active.

Kolev expects private-public partnership to be prioritized next year.

The BIA survey found 43 per cent of respondents to be supportive of Bulgaria's entry in the euro zone. 41 per cent see no particular benefits for Bulgaria at this stage.

Twenty-eight per cent hope that the Bulgarian presidency of the EU Council will bring tangible benefits for their business.

Asked to assess the work of the state institutions, the BIA members give the highest mark to Ombudsman Maya Manolova, followed by the President's Office and the tax administration. The latter gets 49 per cent approval, most likely due to its efforts to digitize taxpayers' communication with the tax authorities.

Among the key problems identified by businesses is the substitution of subcontractors, especially in construction. At present no legal safeguards exist against this practice and the BIA has proposed legislation to change that (including a ban on subcontracting where the contractor has failed to identify the subcontractor in advance).

Overdue payments remain another one of the worst problems for businesses.