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The economic activity indicator in Bulgaria is raising


In the third quarter of 2019, the cyclical component of the economic activity indicator (IIA) in Bulgaria remained negative, but its value is going up, compared with the previous three months. This development manages to neutralize the decrease in the long-term component and contributes to the retention of IIA around the second quarter level, the fourth issue of the Ministry of Finance quarterly  “Economic Activity Indicator” reports.


The MF said  the favorable dynamics of the cyclical component was supported by almost all variables included in the IIA. VAT revenues made the biggest positive contribution , affected by the increased transactions  income in the country, in line with the rise in consumption.  Cyclical improvement was also strongly influenced by financial sector indicators, followed by industrial production and business climate indicators in industry, which is linked with the cyclical improvement in EU GDP 28 being under observation. The indices of international oil prices and non-energy raw materials showcased some  deterioration in the cyclical position.

The rate of synchronization between the estimated cyclical fluctuations in the eurozone and the Bulgarian economy continued to strengthen throughout the third quarter. In accordance  with the expectations in the previous issue, the current dynamics of the IIA cyclical component has followed the favorable development of € -coin (euro area business cycle indicator - third quarter). The improvement in the eurozone's cyclical position has reflected the more optimistic consumer attitudes and the growth in the number of newly registered cars.


A slight rise in € -coin was also reported in November, which displayed some revival in economic activity. The cyclical position of the eurozone  has remained suppressed due to continuing weakened  activity in the industrial sector. As a whole, estimates for the € -coin cyclical position in 2019 have reached their lowest levels since 2013, said Vladislav Goranov, emphasizing that this hampers the opportunities for further improvement of the cyclical component of IIA in the next quarter.


The preliminary evaluation of IIA  for the fourth quarter stays negative, but is expected to rest close to its level from the third quarter.

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