Bulgaria no longer meets all the Maastricht criteria, and our country takes into account the discrepancies in the requirements for inflation. This is clear from the latest Convergence Report of the European Central Bank. Compared to the 12-month average value of the Harmonized Index of Consumer Prices in Bulgaria, inflation is 2.6%, which is significantly above the reference value of 1.8% for the criterion of price stability. Against the background of the coronavirus pandemic, there is a high level of uncertainty about how it will develop in the coming months, according to the ECB. In its report, the bank expresses concern about the sustainability of inflation convergence in Bulgaria in the long run, taking into account the increase in unit labor costs, especially in the period 2017-2018. According to the bank, the equalization process is likely to lead to positive difference in inflation compared to the euro area, as the gross domestic product per capita and prices are significantly lower in Bulgaria than in the euro area.

Bulgaria’s parliament on Wednesday approved government plans to cut value added tax (VAT) on food provided by restaurants and catering services to 9% from 20% from July to help an industry hit hard by the coronavirus crisis. The cut would run through 2021 as a temporary measure to help the sector recover. It would not affect alcoholic drinks bought in restaurants and provided by caterers, which will still attract a 20% VAT rate. The plan was floated by Prime Minister Boyko Borissov last month despite opposition from his finance minister. It was also criticised by economists who say it would open the door for many more industries to seek tax cuts.

Bulgarian public gas supplier Bulgargaz has proposed a 4.13% decrease in the wholesale price of natural gas to be valid in July. According to the proposal, the price will fall by BGN 0.84 to BGN 19.49 per MWh, excluding VAT and excise duty. In a separate statement on Wednesday, Bulgargaz said it is planning to propose a 1.03% decrease in the wholesale price of natural gas to be valid in August. In March, Bulgargaz negotiated a 40.3% cut in the price of Russian natural gas imports based on an agreement between the European Commission and the Russian company. Bulgargaz and Russia’s Gazprom changed the pricing formula, setting as its main component the price on the regional markets instead of that of petroleum derivatives. Bulgarian energy regulations were recently changed and now require Bulgargaz to set the gas price monthly instead of quarterly. The Energy and Water Regulatory Commission (EWRC) has the final say on the proposed changes in the wholesale price, at which the state-owned company sells natural gas to end-suppliers and customers directly connected to its transmission network. Bulgaria currently imports almost all of the natural gas it needs from Russia. The country intends to diversify half of its imports by the end of this year.

At the last possible moment, the state participated in the auction for 110 securities, giving the right to participate in the procedure for raising BGN 200 million for First Investment Bank. Raising this amount was a key condition for Bulgaria to apply for the Eurozone. To date, there have been no candidates to buy 26% of the bank. The state and a second anonymous investor were rescuers at the last minute. The participation of the state was announced without details by the Minister of Economy Emil Karanikolov. Almost the entire issue was acquired by one of the investors - 108 million rights. If the unknown buyer pays their issue price of over BGN 196 million by June 25, they will acquire a share of 26.18% of the bank's capital. There is no formal requirement to reveal who the investor is, but his name will certainly become known after the eventual subscription of the shares, as they will own over 5% in a public company. The state has participated in the capital increase of First Investment Bank. The capitalization of Fibank is the last unfulfilled commitment of the government for the country's membership in ERM II and the banking union. If the state is the buyer, it will have to put a lot of effort into justifying why it is investing under conditions that virtually no private investor would. The reason for the lack of interest from the market was that the price of the new shares - BGN 5, was about twice as high as the stock market.

Bulgaria's Vratsa municipality said that local company Lesto Investment broke ground for an BGN 18 million metal processing plant. The investment envisages the reconstruction and modernisation of existing facilities in the city of Vratsa, in nortwestern Bulgaria. The project is expected to be completed within one to two years and create 150 jobs. The investment will be financed with a loan from DSK Bank, EU funding from the Regional Urban Development Fund, and the company's own funds. The plant will be operated by Lesto Investment's unit Lesto Product, which has 25 years of experience in manufacturing metal products. According to registry agency data, Lesto Investment is fully owned by private individual Ivaylo Gladnishki.

The Bulgarian units of German group Robert Bosch said that their consolidated sales in the country grew by an annual 46% to BGN 297 million in 2019. "We have achieved strong growth in 2019 due to increased demand for our products and services and strongly supported by our software development activities," Mihai Boldijar, general manager of Sofia-based Robert Bosch and representative of the Bosch Group in Bulgaria, said in a statement. The number of employees of the Bosch Group in Bulgaria nearly doubled to 430 at the end of 2019, as the company opened an engineering centre last year following investment of EUR 3.5 million. The growth of the engineering centre in Sofia, which currently employs over 250 people, is expected to continue with additional highly qualified software and hardware professionals as well as project management for global products. For the current business year, Bosch Bulgaria's forecast is not so positive due to the coronavirus pandemic. “While due to the current situation we expect a challenging year also in Bulgaria, we remain committed to the local market and its long-term potential,” Boldijar said. The Bosch Group in Bulgaria comprises three companies - Sofia-based Robert Bosch, Bosch.IO and BSH Domakinski Uredi Bulgaria.

Bulgaria's Vratsa municipality said that German automotive data transmission products maker MD Elektronik has completed the construction of a BGN 21.5 million plant and an office building in the city. Production of data transmission cables at the plant is expected to start by the end of the year. The plant and the office building are located on an area of 10,000 sq m. The first employees have already been hired.

Bulgaria is the first of the 28 countries in the Coca-Cola Hellenic Group to launch a new range of Costa Coffee products. The full range of products will include coffee beans and ground coffee, suitable for making at home or in the office. Although the opening of new franchise cafeterias is not part of these plans, in our country they play a significant role in building and establishing the brand. "The main mission of the company is to be close to our customers and clients and to offer drinks for all occasions, which is happening, thanks to our commitment to provide great products, variety and quality. We are happy to welcome this new addition to our 24/7 portfolio and to be the first market in the Coca-Cola Hellenic Group to launch Costa Coffee This new page is a key moment in our 55-year history in Bulgaria - Costa Coffee is a great and well-known, proud and passionate brand with a history , based on the craft, which will fit very well here in Bulgaria - a country with a well-established coffee tradition, "said Jurg Burkhalter, CEO of Coca-Cola HBC Bulgaria.

The volume of real estate investments in Romania in the first quarter increased by 21% compared to the same period last year to EUR 145 million, even in the absence of the expected large-sized deals that were deferred. "The emergency measures were lifted in Romania in mid-May, so we expect to better understand the extent of the coronavirus' impact on the economy and the real estate market at the end of the second quarter," according to real estate consultancy firm JLL that compiled the report, quoted by Economica.net. Both office and retail yields at the end of the first quarter remained at 7.00%, while the primary industrial yield was 8.00%. The expectations for the volume of the market in the first quarter were much higher, as there should have been two large transactions with a combined value of over EUR 400 mln, including the sale of the NEPI Rockcastle office portfolio in Romania. However, none of them was eventually closed. Overall, office transactions represented around 54% of the total deals in Q1, while the industrial segment accounted for almost 31%, with the rest being mixed properties, hotels, and residential properties.

U.S. consumer prices declined in May for a third straight month as the coronavirus-induced recession continued to depress demand. The consumer price index fell 0.1% from the prior month after a 0.8% drop in April that was the biggest since 2008, Labor Department figures showed Wednesday. The gauge increased 0.1% from a year earlier following a 0.3% gain in the year through April. The core CPI, which excludes volatile food and fuel costs, also fell 0.1% from the prior month after a 0.4% decrease in April. Consumer inflation by that measure rose 1.2% from the prior year, the smallest advance since 2011, following 1.4% in April. The third month of falling prices could spur concern about the risk of deflation as the U.S. economy begins recovering from the Covid-19 recession. At the same time, with states relaxing restrictions and stay-at-home orders, prices stand to increase with the pickup in demand for goods and services. The Federal Reserve -- which targets 2% inflation based on a separate Commerce Department measure -- often looks to the core index for a better gauge of underlying price trends, and those costs have also declined three consecutive months.

China’s manufacturing sector continued to suffer from the impact of the coronavirus pandemic in May, as data released on Wednesday showed factory gate prices plunged at a faster pace last month. The producer price index (PPI), reflecting the prices that factories charge wholesalers for their products, fell 3.7 per cent year-on-year in May, data from the National Bureau of Statistics (NBS) showed, the sharpest decline since March 2016. That was worse than April’s reading of a 3.1 per cent decline and above the 3.3 per cent contraction tipped by analysts in a survey by Bloomberg. The consumer price index (CPI), meanwhile, rose 2.4 per cent from a year earlier, down from a 3.3 per cent gain in April, the NBS said. Analysts had expected an inflation rate of 2.7 per cent. Within the CPI, food prices jumped 10.6 per cent year-on-year, down 3.5 per cent from April. Prices for pork – a staple meat in China – were up 81.7 per cent, a decline of 8.1 per cent from a month earlier. Core inflation, which excludes food and energy prices, inched up 1.1 per cent in May.