ECONOMY

In Brief

Bulgarian economy shrinks by 5 pct SOFIA (AFP) – The Bulgarian economy shrank by 5.0 percent in the first quarter of 2009 compared to the previous three months, official data showed yesterday, confirming that the country had entered a recession. Bulgaria’s gross domestic product (GDP) had contracted by 1.6 percent in the final quarter of 2008, according to seasonally adjusted figures released yesterday by the national statistics institute. Recession is traditionally defined as two consecutive quarters of negative growth. This is the first time that Bulgaria’s economy has shrunk since 1997, when the country was in a deep crisis. The statistics office also provided quarter-on-quarter figures for the first time this month. It usually only releases 12-month comparisons. Romania sticks to date for eurozone entry BUCHAREST (Reuters) – Romania’s center-left government has kept its 2014 deadline for joining the eurozone in a convergence report, which was revised after the European Union member secured 20 billion euros in foreign aid. The report, which was sent to Brussels, was revised to include budget conditions attached to the aid package, led by the International Monetary Fund, as well as revised macroeconomic indicators and prescribed reforms. Under its agreement with foreign lenders, Romania plans to implement vast public sector reforms but was allowed to keep a budget deficit target of 5.1 percent of gross domestic product (GDP) this year, barely smaller than in 2008 and far above EU limits. It cut spending by roughly 1 percent of GDP. The report sees the consolidated budget deficit at just under 1 percent of GDP in 2012. Turkish boost Turkish manufacturers’ capacity utilization increased in May from the previous month for the third consecutive month after the government cut taxes on cars and refrigerators to stimulate consumer demand. Manufacturers used 70.4 percent of their capacity last month, compared with 66.8 percent in April, the statistics office in Ankara said on its website yesterday. (Bloomberg) Serbian inflation Serbian central bank Governor Radovan Jelasic said he expects the inflation rate to fall to 7.9 percent in June from 8.2 percent the previous month. «Agricultural prices will fall sharply,» Jelasic told a news conference in Belgrade yesterday. The government yesterday raised fuel prices by an average 4.6 percent. Jelasic said that he expects a further increase in the prices of fuel by 5.4 percent and cigarettes by 2 percent, as agreed to with the International Monetary Fund (IMF). Eastern Europe’s economies are being battered by the global credit crisis, which is slowing industrial output, damping tax revenues and pushing up unemployment. Serbia opened a $516-million credit line with the IMF last year, joining Hungary, Ukraine, Romania and Latvia. (Bloomberg) Output falls Bulgaria’s industrial output fell 20 percent year-on-year in April as the global economic downturn forced companies to cut operations or halt production, statistics office data showed yesterday. (Reuters)