Банкеръ Daily


BG GDP=Product of Boyko+Vladko

The forecasts – deliberately tightened, the execution - bloated

GDP - the acronym we refer to as Gross Domestic Product, has recently received a new interpretation - a Boyko+Vladko product. Named after its godfathers, who contributed to its "formatting" - Boyko Borisov and Vladislav Goranov. So far, they have artificially lowered GDP growth forecasts to squeeze budget surplus, which the Prime Minister would allocate behind the back of the parliament at the end of each year. Now - because of the Eurozone  waiting area, they have inflated the GDP growth report manipulatively.

So: The budget estimates are deliberately curtailed,  performance - forcefully bloated.

The main objective indicator of the state and development of any economy in our case turned out to be a subjective occupation.

We have just got used to the annual manipulations of the projected GDP growth when the cabinet lied about the growth of Bulgaria not only to the Bulgarian people and the Bulgarian businesses, but also to the European Commission, European Central Bank, Eurostat, European business and so on. We stated that it was 3.7-3.4%, and it turned out to be well below 1%. This was announced last week by BSP MP Rumen Gechev. Bulgaria's entry into the euro zone waiting room has been delayed due to manipulation of statistics on the economic growth in Bulgaria, he announced loudly in the corridors of parliament.

Socialists have found that imports last year were significantly smaller well by billions. According to information from the opposition EUR 2 billion were not recorded on imports and it went probably about the incorrectly reported petroleum products. With the corresponding revaluation, according to Rumen Gechev's accounts, the growth was not 3.3%, but 0.8-0.9%.

Socialist leader Cornelia Ninova supported Gechev's thesis and said it was going about a criminal manipulation. Ninova also said that the socialists had talks with the NII and the BNB.

Gechev had said that the two institutions were also in the process of detecting this major mistake, but Ninova refused to confirm that the NII and the BNB accepted his conclusions.

Similar miscalculations are not a precedent for the Balkans. Greece is the undisputed paragon in this regard. Our southern neighbour had provided Eurostat with incorrect data of its economic indicators, which opened its way to the euro zone in 2001. This has been recently stated by the Former President of the European Commission Jean-Claude Juncker. "The monetary union must be more reliable than marriage, otherwise no one will believe in it," he said and stressed the necessity to check everything carefully before a country joins the euro area.

"The truth is that in 2001 Greece became a member of the euro zone after falsifying statistical data," he added.

However,” Sciatica” emphasized that Europe is learning from its mistakes and "Eurostat can now check everything in each EU country".

So, as it is said in Bulgarian, maybe “trouble troubles us.”



Prof. D.Sc. Danail Danailov, Lecturer and Former Rector of UNWE:

Years of manipulation!

Prof. Danailov, your estimates for the period from 2013 to 2019, published in official editions, are 90-95 % of the actual results. Why are the realizations of the Ministry of Finance's plans for this period "lagging behind?"

Because I am responsible for my forecasts, unlike the chaos which I will tell you about later. For 2016, the MoF forecast is for 2.1% GDP growth, and in reality it is 3.5%. For 2017 - at 2.5% forecast, 3.6 percent were actually reported. For 2018 - the forecast is 2.7%, the real report is 3.9%. I argue that the Treasury artificially lowers its growth forecasts so that it can generate a surplus in the fall each year. Underline it - artificially!

Would you say it directly in the eyes of the government?

Yes, I did that. My book "Bulgaria in the First Third of the 21st Century" is available to both Finance Minister Vladislav Goranov and Deputy Prime Minister Tomislav Donchev. The latter spoke about the added value of the EU funds, and Boyko Borisov immediately scolded at him for talking  nonsense.

But the European Commission gives much lower forecasts for Bulgaria's growth as well.

- Yes, they give the saddest forecasts for the development of Bulgaria. And this is the institution that holds us in its clutches and conducts everything. In 2016, the EC forecasts 2.3% growth in our country, and we have actually reached 3.5% according to Eurostat. For 2017, the EC gave us 2.95% and Eurostat reported 3.6%. For 2018, the EC forecast is 2.8% growth, while Eurostat has reported 3.2 percent.

Aren't our scientists a corrective to the data given?

No, look at the forecasts of the Institute for Economic Research of the Bulgarian Academy of Sciences. For 2016 - 1.9% forecast, 3.6% real, for 2017 - 2% forecast, 3.6 - real, for 2018 - 2.4% forecast, 3.2% real.

Is it incompetence or intentionality?

The main issue is the responsibility of the institutions for the future of Bulgaria and the Bulgarian people. You can't go ahead with low-credibility  predictions. Our Treasury guesses 50% of the  results, the European Commission knows less than 50%.

According to the textbook

Gross domestic product is one of the main indicators in the financial and economic world. It represents the value of all goods and services produced by a country's economy annually. The value of GDP includes only market transactions, i.e. those that have gone through a sale and are officially registered. It does not include either free labor or the share of the shadow economy.

The formula for calculating GDP looks like this:

GDP = C + G + I + NX


"C" represents the total consumption of households in a country's economy

"G" is the sum of all government spending

"I" is the sum of all investments in the business sector

"NX" is the net export of the country (it is calculated as total export minus total import, or NX = export-import)

GDP is nominal and real.

Nominal GDP is calculated at current prices. Real GDP is calculated at comparable prices, i.e. it includes inflation.

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