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Business MONDAY, 25 February 2013

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Investors Freeze Deals amid Political Instability in Bulgaria

The industrial property market will probably lose most from the resignation of Boyko Borissov’s Cabinet and the following political instability and economic uncertainty in Bulgaria

(Sofia, Feb 25) - The industrial property market in Bulgaria appears to be the hardest hit by the snap resignation of PM Boyko Borissov’s government and the following economic uncertainty in the country.

Foreign investors have eyed a few well-functioning ventures on the Bulgarian market over the past few month and real estate agents across the country expected many Greek companies to more their business to Bulgaria, because of the unstable financial situation in their country.

Foreign investors have also inquired about a number of Bulgarian car parts manufacturers and producers of construction materials.

But the recent calls for removal of the currency board and the flat tax in Bulgaria can scare away these investors. If they don’t flee immediately, they will freeze all their deals in Bulgaria, until the political situation becomes normal again.

The real estates market appears to be unaffected by the recent political turmoil in the country. Apparently, the change of government cannot stop the Bulgarians to sell their home or buy a new one.

However, the prices of real estates may drop further, if the currency board is removed. Such a scenario inevitably invokes galloping inflation, which will have a negative effect on the real estates market in the country.

Yuliana Uzanicheva

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