After economic challenges in ----, there is a brighter outlook over our five-year forecast period, as we see scope for greater consumption expenditure by households. This trend is reflected in BMI s household income analysis - although considering Bulgaria s low incomes in a European context, the growth forecast is weak. Bulgaria will remain a low income market in a European context in ----, with -- of households expected to have incomes below USD-,---. We consider this level the threshold for consumer electronics market participation due to a lack of purchasing power (with the exception of -G handsets and very low cost smartphones). Bulgaria s household income profile is forecast to strengthen throughout the medium term, with a migration of households to higher income levels. This provides vendors with new market participants and an easing of price sensitivity in the mid-market. However, this upside is partially offset by Bulgaria s declining population, with the total number of households forecast to decline by ---,--- to -.-mn throughout the forecast period.
...BMI revised down the forecast for Bulgarian consumer electronics spending in ---- in the Q--- update. We forecast the market will expand by -.- to USD---mn.We downgraded the outlook to reflect the negative impact of smartphones and phablets on tablet sales that has exceeded our expectations. ...We forecast the market will expand by -.- to USD---mn.We downgraded the outlook to reflect the negative impact of smartphones and phablets on tablet sales that has exceeded our expectations. We expect a repeat of handset sales growth outperformance, in part as a result of economic conditions, but also the momentum of the smartphone boom as penetration is considerably lower in Bulgaria than Western Europe where saturation has been reached. Value growth is nonetheless expected to be a marked improvement throughout ----, when weak economic sentiment and lev depreciation were major drags on the market. In ----, the lev depreciated from an average of BGN-.-/USD in ---- to BGN-.-/USD in ----. This eroded Bulgarian household purchasing power in global markets, and reduced the affordability of consumer electronics devices, with the PC and
...BMI View: We expect a turnaround in the Bulgarian consumer electronics market in the medium term, with upside for value growth in all three segments throughout ---------, when our Country Risk team forecasts significant lev appreciation against the US dollar. This is in contrast to the depreciation of ---- that hit device spending by reducing import affordability. ...
