GDP growth will ease in q/q terms in Q4 compared to its pace in the first half of 2019 but will then accelerate in Q1’20, the Bulgarian National Bank (BNB) said in its latest Economic Review edition. We note that GDP growth was 0.7% q/q in Q3. The BNB did not come up with exact forecast for the GDP growth in 2019 and in 2020 but added that growth will remain supported by private consumption and government investments. The rapid wage growth boosting household’s purchasing power and the low interest rates will be the main factors favorable to private consumption in the next two quarters, the BNB said. Contrary to public investments, private investments will be curbed by the uncertain external environment and weaker exports, according to the central bank. The main risks for the outlook to Bulgaria’s economic activity arise from the already started global economic slowdown, contracting industrial production growth given the weaker global trade, protectionist measures across the globe following the trade dispute between China and the USA, as well as Brexit, the BNB noted. The external factors will weigh on Bulgaria’s exports in Q4’19 and Q1’20 and another potential risk stems from a decreased demand by Turkey, which is the largest Bulgaria’s trading partner outside the EU.

Deposits of Bulgaria's non-government sector rose by an annual 7.9% to BGN 83.2 billion at the end of October, paring its growth rate at the end of September, the central bank, BNB, said. At the end of October, the value of deposits was equal to 71.9% of Bulgaria's estimated gross domestic product in 2019, BNB addded. Deposits of households increased by an annual 8.2% to BGN 54.2 billion at the end of October. Deposits of non-financial corporations totalled BGN 25.8 billion, up by 6.9% year-on-year, while deposits of financial corporations added 13.7% to BGN 3.2 billion.

Three companies continue to compete for investor in Belene NPP. These are Russia's Rosatom, through its subsidiary Atomenergoprom, Korea's Hydro and Atomic Energy Corporation and China's State Nuclear Corporation. They had to be selected by a working group comprising representatives of the Ministry of Energy, BEH and NEK. The choice of these companies is no surprise because they meet the requirement for a strategic investor, Bulatom chairman Bogomil Manchev said. According to him, the project will include the French Framatom and General Electric. In practice, they will also be investors because they offer a leasing scheme to pay for the equipment they will supply for the plant, commented energy expert Prof. Atanas Tasev. Consulting company IPK&UP, the German Bektron-Liaz Technical Engineering, the Bulgarian-Czech consortium Belene Nuclear Power Plant 2019 and the consortium Belene Bulgaria consisting of the companies of Kovachki have expressed interest as an investors.

The European Commission (EC) has approved Bulgaria's plans to provide financial support for the construction of a combined heat and power (CHP) plant in Sofia which will run on unrecyclable municipal waste. The support will consist of a direct grant of some EUR 90.8 million financed by EU structural funds managed by Bulgaria, and a EUR 3 million loan granted by Sofia municipality. The measures are necessary, as the project would not be carried out without public support. The CHP installation will burn 180,000 tonnes of waste per year in the Bulgarian capital, which has long been criticised by the European Commission for its poor air quality. The co-generation plant, set up by municipally-owned company Toplofikatsiya Sofia, will produce heat and electricity with a capacity of approximately 55 megawatts (MW) of heat and 19 MW of electricity.

Bulgaria's Commission for Protection of Competition has imposed a BGN 53,172 fine on local power projects developer Energeo, a wholly-owned unit of local group Geotechmin, over unfair competition practices. Energeo has acquired data concerning the operations of local Ritam-4-TB from one of Ritam-4-TB's former employees, and used the information to attract clients. Ritam-4-TB's former employee - M. Stoynov, was also fined BGN 5,000. Energeo generated a turnover of BGN 53.2 million in 2018, and closed the year with a net profit of BGN 1.2 million. The Geotechmin group posted revenue of BGN 628.3 million last year and a net profit of BGN 148.3 million.

Two subsidiaries of Energo-Pro Varna submitted an application to the Energy and Water Regulatory Commission for the watchdog to authorize their merger. These are Energo-Pro Trading and Energo-Pro Energy Services. The decision comes from the parent company. The motive for the merger of the two companies is that they are both engaged in the activity of "electricity trading", and in addition it aims to optimize shareholder ownership. Energo-Pro Trading also states that after the transformation, the company will have a more active presence in the energy markets within the EU. The universal successor after the merger will be Energo-Pro Trading SPJSC, to which all the assets of Energo-Pro Energy Services SPLTD will be transferred. After the merger, the transferred company will be terminated without liquidation, as will its electricity trading license. However, the name of the merged company will be Energo-Pro Energy Services. All resources, including staff, will be transferred to the receiving company. This also applies to the customers of the terminated company.

Bulgarian car battery maker Monbat said that its consolidated profit before taxes increased by 163% on the year to BGN 16.4 million in the first ten months of 2019. The company’s consolidated net sales revenue rose by 12.4% year-on-year to BGN 276.7 million in January-October. Monbat’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), excluding discontinued operations, increased by an annual 42.1% to BGN 31.2 million in the period under review. In October alone, Monbat's profit before taxes edged down by 0.3% year-on-year to BGN 2 million, despite a 19.4% rise in revenue to BGN 39.0 million. Monbat's shares closed 0.79% lower at BGN 6.30 on the Bulgarian Stock Exchange on Monday.

Aside from security risks, European governments should consider the wider consequences of handing out contracts to 5G suppliers, according to an EU document and one which could have repercussions for the Chinese firm, Huawei, that is under scrutiny as a potential 5G supplier. “In addition to the technical risks related to cybersecurity of 5G networks, also non-technical factors such as the legal and policy framework to which suppliers may be subject to in third countries, should be considered,” a draft document prepared ahead of a meeting of European ministers and seen by CNBC said. 5G is the next generation of mobile internet technology, designed to deliver super-fast data speeds. However, the debate over the providers of 5G technology has become politicized, with officials in the U.S. and U.K., among other countries, expressing concerns that suppliers like Huawei could pose a security threat. The same EU document highlighted that European countries should “consider the need to diversify suppliers in order to avoid or limit the creation of a major dependency on a single supplier.”

LVMH, the world’s biggest luxury group, is to take over Tiffany & Co, the US jeweller famed for its engagement rings and white diamond necklaces, in a $16.2bn deal. Bernard Arnault’s luxury goods empire, with brands such as Louis Vuitton, Dior and Moët & Chandon, announced it had agreed to pay $135 a share in cash. LVMH said the deal would transform its watches and jewellery division, which includes Bulgari, TAG Heuer and Hublot, and boost its presence in the US. It is the latest addition to the group’s 75 big brands, known as “maisons” or houses. The French company wants to to restore shine to Tiffany, whose revenues have slowed due to lower tourist spending. Founded in 1837 when Charles Lewis Tiffany opened the first store in downtown Manhattan, New York, the US jeweller now has more than 300 stores worldwide and employs more than 14,000 people. It is LVMH’s biggest takeover under the 32-year reign of Arnault, its 70-year-old chairman, chief executive and majority shareholder.

China needs to resolve outstanding financial risks, and must counter risks from “abnormal” market fluctuations that stem from external shocks, said the central bank, as Beijing prioritizes financial stability amid increasing challenges. Financial markets are highly sensitive to global trade situations and rising uncertainties in global liquidity, said the People’s Bank of China (PBOC) in its annual financial stability report, adding that it will step up real-time supervision on stock, bond, foreign exchange markets to prevent cross-sector risk contamination. Bond defaults may continue, so authorities must prevent the risks of such defaults from triggering systemic risks, it said, while penalties on regulatory violations in the securities market would be increased. Beijing has stepped up daily supervisions and assessment on potential “black swan” and “gray rhino” events that may occur in the future and has prepared contingency plans, as downward pressure on the economy rises, said the PBOC.