Where is the Bulgarian economy heading for? This is a question that many Bulgarian and international institutions, such as the World Bank, the International Monetary Fund, the European Commission, the Bulgarian National Bank, the Ministry of Finance, etc. have been trying to answer. Now is the season of the autumn estimates and assessments, which are considered to be far more plausible than spring forecasts. The Ministry of Finance estimates that economic growth will reach 3.4% this year. BNB is much more optimistic, forecasting 3.7%; the World Bank expects 3.2 % while the forecast of the European Commission is 3.6%. It is yet to be seen which of the forecasts will be closest to reality but it seems that the forecasts of the Treasury, which is directly involved in the management of the economy and which has the latest economic indicators, should be the most accurate. This is also evident from the ministry's draft budget for 2020. The document states that "economic growth will reach 3.3% in 2020, driven by consumers and investments." This slowdown has already been observed in some of Bulgaria’s largest European economic partners, such as Germany.

Gross external debt fell by 0.5% m/m to EUR 34,039.1 mln at end-August, according to the latest Bulgarian National Bank (BNB) data. The debt accounted for 57.2% of the GDP forecast for 2019, down from 57.5% in the previous month. The monthly drop in the gross external debt was on the back of declines in both of the public and private sector external debt during the month. Public external debt went down by 0.5% m/m to EUR 5972.4 mln and represented 10.0% of GDP. Its decline reflected some slight repayments on state’s loans, as well as a 0.4% m/m increase in the residents’ holdings of government eurobonds, which are therefore no longer calculated as external debt. The government has not issued any new eurobonds in the past three years but the new draft budget law suggested that it might go for foreign borrowing in 2020 if necessary. We see some other risks for a potential increase in the public external debt in the mid-run related to the plans for the building of the nuclear power plant Belene and state-owned Bulgartransgaz’ gas pipelines.

One of the mythical infrastructural objects in Bulgaria - the tunnel under the Shipka pass, suddenly emerged again. It has been talked about since the 70s, but so far there has been no prospect of building it. Last week, however, the Road Infrastructure Agency (RIA) surprisingly announced a public auction for design and construction, which made it clear that not a single long tunnel would be made, but a few shorter ones instead. The estimated value is over BGN 320 million, including VAT, and the implementation deadline is just over four years. Just a month ago, RIA claimed there was no funding for the project. The main issue now is again money. "The procurement is planned to be offered for financing by the Operational Program Transport Connectivity 2021-2027. There is currently no funding for the implementation of the site," the tender documentation says. The problem here is that no official documents from the European Commission have been adopted so far to regulate how to apply for the next programming period 2021-2027. It is also interesting that within just a month the value of the Shipka tunnel fell by BGN 200 million. "The estimated value of construction of the facility is BGN 520 million. Different options for its financing are being sought," RIA said in September, and now the budget is BGN 320 million.

Plovdiv-based company builds the largest bathroom furnishings manufacturing plant in Bulgaria. Ceramic Group made its first sod at its site at the end of last week. The investment is worth BGN 5 million, funded entirely of the company's own funds. The bathroom furnishings factory covers an area of 10,000 square meters. The factory will start with the production of bathroom furnishings and later will also open lines for kitchen countertops and backs to load the capacity completely, explained the manager of Ceramic Group. The company owns warehouses in Rousse, Plovdiv and Sofia. It is an exclusive representative of the major Bulgarian and European manufacturers of sanitary ware, faucets and bathroom accessories. In 2016, Ceramic Group built a Victoria Ceramics shopping center, located opposite Jumbo near Plovdiv. The center has 12,000 square meters of commercial space, of which 2,000 square meters is a modern exhibition hall.

Maxima Bulgaria (the owner of the T-Market chain) can lease 11 commercial outlets from the Triumph chain in Plovdiv in the long term, as the transaction is not a concentration and will not lead to the establishment or strengthening of a dominant position. The Competition Protection Commission (CPC) ruled this, after the company asked the antitrust authority in August to rule on the deal. Maxima Bulgaria will lease for a long time commercial sites, whose assets are owned by three companies: Markotsi SPLTD, Vanichi 2008 SPLTD and Top Tennis SPLTD, which operate the Triumph stores. The contracts provide for the possibility of early termination. They do not envisage any rights for Maxima Bulgaria to provide control over the management of landlord companies, the commission's review shows. In addition, Maxima Bulgaria will not continue to operate the stores instead of its previous owners. On the contrary - the company will rent the premises empty and will invest significant own funds for their repair and rebranding, so that they can operate under the brand and in the form T market. Maxima Bulgaria will also have to invest significant funds to fill the stores with the relevant goods and products.

Supermarket chain operator Billa Bulgaria, part of Germany's REWE Group has opened a new store in the city of Stara Zagora, in southern Bulgaria, following an investment of over BGN 1 million. The new store, which is the company's 130th in the country, offers a commercial area of some 755 square metres in one of the most visited shopping centres in the city - Mall Galleria. The new store will employ 21 people. Earlier this year, the company said that it will invest over 34 million levs in the expansion and renovation of its network of stores in 2019. Billa, which entered the Bulgarian market in 2000, operates stores in 38 cities across the country, employing over 4,500.

Bulgarian cosmetics maker Lavena said that its net profit in the first nine months of 2019 grew to BGN 1.5 million from BGN 929,000 in the same period of 2018. Lavena's revenue rose to BGN 15.4 million in the January-September period of 2019 from BGN 12.9 million in the comparable period of last year, the company said in an interim financial statement. Total operating expenses increased to BGN 13.8 million in the review period from BGN 11.9 million the year before, mainly due to a rise in expenses for salaries and hired services. Lavena spent BGN 1.4 million on salaries in January-September 2019, compared to BGN 1.2 million a year earlier, while expenses for hired services rose to BGN 3.0 million from BGN 2.6 million. Lavena was majority-owned by local company Baltimore at the end of September.

The euro zone’s rescue fund, the European Stability Mechanism, agreed to allow Greece to pay back earlier some of its debt to the International Monetary Fund, the ESM said in a statement. The move, which concerns loans worth around 2.7 billion euros ($3.0 billion), allows Athens to reduce its debt-servicing costs, because IMF loans carry higher interest than Greece would now pay on the market. The decision followed a Greek government request to the ESM in September to repay some of its loans to the IMF, which were worth about 9 billion euros. “Greece’s early partial repayment to the IMF will be beneficial for both Greece and the ESM,” said the fund’s chief, Klaus Regling. Greece, cut off from the markets during the sovereign debt crisis of 2010-2015, borrowed heavily from the IMF and euro zone governments. Under the loan agreements Greece has negotiated with its euro zone lenders, the early repayment of 2.7 billion euros of debt to the IMF would have triggered proportional payment of 52.2 billion euros to the ESM and its predecessor, the European Financial Stability Facility, if the EU had not waived the obligation.

Warehouse giant Prologis Inc has agreed to acquire rival industrial real-estate business Liberty Property Trust in a $12.6 billion deal to improve its U.S. presence amid the ecommerce boom. If approved, Prologis said Liberty shareholders would receive 0.675 times a Prologis share for each unit they hold, about $61 a share. The deal is expected to close in the first quarter of 2020. Prologis, which has a global footprint, said the all-stock deal including the assumption of debt would deepen its presence in U.S. markets such as Pennsylvania’s Lehigh Valley, Chicago, Houston, New Jersey and Southern California. “Liberty’s logistics assets are highly complementary to our U.S. portfolio and this acquisition increases our holdings and growth potential in several key markets,” Prologis Chairman and Chief Executive Officer Hamid Moghadam said. Prologis plans to sell about $3.5 billion worth of assets, including $2.8 billion of “non-strategic” logistics properties and $700 million of office properties, the announcement said.

Hong Kong has fallen into recession, hit by five months of anti-government protests that erupted in flames at the weekend, and is unlikely to achieve any growth this year, the city’s Financial Secretary said. Black-clad and masked demonstrators set fire to shops and hurled petrol bombs at police on Sunday following a now-familiar pattern, with police responding with tear gas, water cannon and rubber bullets. TV footage showed protesters, who streamed into the Kowloon hotel and shopping artery of Nathan Road on Sunday, setting fire to street barricades and squirting petrol from plastic bottles on to fires at subway entrances amid running battles with police. Protesters are angry about what they view as increasing interference by Beijing in Hong Kong, which returned to Chinese rule in 1997 under a “one country, two systems” formula intended to guarantee freedoms not seen on the mainland. China denies meddling. It has accused foreign governments, including the United States and Britain, of stirring up trouble.