BULGARIA - GDP GROWTH ACCELERATES AS EXPORTS CONTINUE TO SURGE
(With the courtesy of PlanEcon-Sofia office), February 08 2001

• BULGARIA - GDP GROWTH ACCELERATES AS EXPORTS CONTINUE TO SURGE
• KEY MACROECONOMIC TRENDS
• Table 2-Export Trends by Commodity Category in January-November 2000
• Table 3-Import Trends by Commodity Category in January-November 2000

BULGARIA - GDP GROWTH ACCELERATES AS EXPORTS CONTINUE TO SURGE

• Preliminary data from the National Statistical Institute reveal that Bulgarian GDP rose at a robust 5.6% in the thirh quarter of 2000 compared with increases of 4.8% and 5.5% in the first and second quarters, respectively. GDP was boosted in the third quarter by the continued strength of export performance and a spur to the service sectors from the sharp recovery of tourism in 2000. Given this better than anticipated growth performance in the third quarter, we project that GDP growth GDP in 2000 as a whole will come in at around 5%.

• The merchandise trade deficit increased by $117.8 million in November to bring the eleven-month deficit to $1.052 billion (8.6% of GDP), more than $130 million wider than in the same period of1999. The deficit on the current account for the first eleven months of 2000 amounted to $559.9 million (4.6% of GDP), only $8.7 million wider than one year earlier. The increase in the trade gap was nearly compensated by higher net income on non-factor services in July, August and September.

• Early in December, the leadership of the ruling Union of Democratic Forces (UDF) publicly acknowledged that it would be necessary to try to broaden the base of their coalition in order to form a government with a working majority after the parliamentary elections scheduled for June 2001. The natural new partners for the UDF in a centrist coalition would be the Euro-Left, a small left-of-center party, and the Movement for Rights and Freedom (MRF), the party of the ethnic Turkish minority, but there has been little progress to date.

• The 2001 budget was approved in December. Thanks to the improved tax revenue performance of 2000 the budget incorporates a package of tax reductions aimed at maintaining the recovery in domestic demand. In the budget debate, the opposition characterized the draft budget as restrictive and likely to derail the recovery of domestic demand in 2001. In contrast, the government pointed to the reductions in the tax burden incorporated into the legislation as constituting a new economic strategy targeting accelerated growth rather than focusing on macroeconomic stabilization

  

KEY MACROECONOMIC TRENDS

On the other hand, domestic demand growth has moderated relative to the comparable 1999 period. The rate of growth of Bulgarian GDP accelerated Nevertheless, given this better than anticipated again in the third quarter of 2000, buoyed by growth performance in the third quarter, it is export performance while growth in domestic likely that the figure for growth of GDP in 2000 as demand moderated. Preliminary data from the a whole will come in at around 5%. National Statistical Institute reveal that Bulgarian GDP rose at a robust 5.6% in the third quarter of On the output side, the pace of industry and 2000 compared with increases of 4.8% and 5.5% in services quickened in the third quarter of 2000. the first and second quarters, respectively. For the Value added by industry grew an impressive first three quarters of 2000, GDP was up 5.3% 21.1% compared to increases of 6.2% and 8.8% in compared with the same period of 1999. GDP the first and second quarters of 2000, respectively, was boosted in the third quarter by the continued Industrial output was up solely due to continued strength of export performance and a spur to the strong export sales, while sales to the domestic service sectors from the sharp recovery of tourism market were lower than in the comparable period in 2000. The number of foreign tourists in Bulgaria of 1999. Value added by the industrial sector in increased 12.9% in 2000, reaching 2.35 million, the first nine months of 2000 increased 12.0% year according to the Ministry of Economy. on year. Value added in services increased 12.2% in the third quarter of 2000 ..,...,_.

  

Table 2-Export Trends by Commodity Category in January-November 2000

  

	Percent Change MO/2000/ 1-10/1999	Share of Total 1-10/2000 in Percent
Total	16. 9	100
Food, drink, tobacco	1. 2	5. 0
Fuels, lubricants	47. 1	27.2
Industrial raw mats	18. 7	30. 7
- base metals	39. 1	6. 2
- chemicals, etc.	8. 8	6. 4
- other raw materials	16. 6	18. 1
Capital goods	7. 9	19. 7
Transport equipment	9. 0	7. 1
Consumer goods	8. 1	10. 3