The management of the Bulgarian Industrial Association (BIA) has warned that the country's real estate sector and related industries should brace themselves for a chain of bankruptcies in 2008, which could affect the gross domestic product growth.

Real estate market is saturated, Bulgarian news agency (BTA) quoted BIA chair Bozhidar Danev as saying. There were more than 20 000 unsold holiday apartments in Bansko and another 200 000 along Bulgaria's Black Sea coast, all of them built with bank loans that needed to be repaid, he claimed.

Intercompany debt at the beginning of 2008 was roughly 100 billion leva, according to BIA estimates, which assumed that debt maintained its annual 20 per cent average growth rate from previous years.

The figure exceeded 81 billion leva in 2006, but was only 34 billion leva in 2001. The combined value of the intercompany debt exceeded Bulgaria’s gross domestic product by 65 per cent, Danev said.