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Grim Backdrop and Cautious Optimism in Bulgaria: A Buzz Interview with Elitsa Ivanova of CMS

Grim Backdrop and Cautious Optimism in Bulgaria: A Buzz Interview with Elitsa Ivanova of CMS

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Even with elections coming up soon for Bulgaria, there are still plenty of interesting topics to report on, including a vibrant deal market and an active energy sector, according to CMS Partner Elitsa Ivanova.

“Earlier this year, the Central Bank of Bulgaria revised its forecasts of GDP growth downwards,” Ivanova begins. “This aligns with all the other European countries, following rising inflation levels, disrupted supply chains, rising commodities prices, and a looming energy crisis,” she says. Additionally, Ivanova reports “political uncertainties which weigh heavily on the economic outlook.”

With elections set for October and no parliament currently in place, Bulgarian legislative efforts are standing still. “The implementation of the Preventive Restructurings Framework Directive is one of the items on the top of the agenda. We all believe that legislation seeking to harmonize Bulgarian law with the EU in this regard will be prioritized by the new parliament and government alike,” Ivanova reports.

Against this “rather grim backdrop,” as Ivanova puts it, there is yet room for “(cautious) optimism. The deal market has held up impressively well, with the most active sectors being those that stand to develop even further in the future – IT, technology, energy, and renewables,” she reports. Specifically, for the energy sector, Ivanova reports “high levels of interest and activity that only stand to be furthered by the green deal and net-zero-waste targets that companies set for themselves. There is a lot of promise and opportunity in the sector, especially with ESG becoming a more familiar topic for businesses on all levels,” she explains. “Clients of all sizes are starting to consider investing in obtaining the necessary knowledge and expertise when it comes to ESG. On the flip side, however, there has been more talk of greenwashing as well, so caution is advised,” Ivanova adds. 

On the whole, Ivanova reports that “the hesitancy that was present, when it came to making budget predictions at the start of the year, has not dissuaded but, as we enter the final quarter, the pipeline remains strong.” She adds that she feels things will continue to improve as Bulgaria marches onwards on the path toward the Eurozone. “Of course, the current political climate is stalling this progress somewhat, but I believe we are still on track to join the Euro in 2024.”

Finally, Ivanova shares her belief that 2023 will “show a fairly resilient deal market. There will be slowing down, in terms of activity, but the levels will likely remain fairly strong.” She adds that “for financing, the reality is that interest rates will be rising and the cost of financing will increase, but companies with strong balance sheets will be able to soak this and keep on operating in the same way as before.” In conclusion, Ivanova adds that she believes “the trends for the new future will remain ESG, renewables, and the overarching digital transformation – so I expect good things to come.”

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