Abstract
The extensive growth model introduced under central planning in the 1950s resulted in rapid industrialization and initially high growth. The efforts to bring the banking system on a sound footing following the 1996–97 crises have hardened budget constraints, but they have yet to result in a reorientation of banking sector activities toward private sector lending. The following statistical data are presented in detail: industrial sector, services by branches, income accounts, financial performance of state-owned enterprises, monetary survey, the exchange rates, and so on.
I. Bulgaria’s Growth Experience and Prospects1
A. Introduction and Summary
1. With macroeconomic stabilization having been achieved, robust growth is now Bulgaria’s overriding economic objective. As a result of the lack of sound economic policies until 1997, the country is lagging the advanced transition countries in the recovery from the transformational recession. Output is still around 30 percent below its pre-transition peak, and per capita income in purchasing power terms is only one fourth of that in current EU members. Bulgaria therefore still has a long way to go to fully realize the potential for productivity improvements from the move to an open and market-based economy, and to reach its goal of catching up with the EU countries.
2. Bulgaria’s growth performance in the last decades has been uneven. The extensive growth model introduced under central planning more than 40 years ago was initially highly successful in achieving rapid growth. But the strategy based on industrialization and high investment had exhausted its growth potential by the early 1980s, and the authorities’ inability to change course left Bulgaria with a highly distorted economy and a heavy external debt burden at the onset of the transition in 1990. The initial transformational recession was prolonged and deepened by the inability of successive governments to implement prudent macroeconomic policies and pursue structural reform, which culminated in the 1996–97 financial crisis and a second pronounced recession. The consistent implementation of sound economic policies since 1997 has, however, resulted in a turnaround. Notwithstanding unfavorable external developments, including the Kosovo crisis, GDP growth has been positive since 1998, and it accelerated to a robust 5 percent in 2000.
3. Despite a remarkable turnaround since 1997, conditions for self-sustained growth appear not yet to be fully in place. Aggregate demand growth in recent years has been driven mainly by the rebound from the 1996–97 crisis and external factors. A look at the supply side also suggests that the economy is still in a recovery phase, with the factors of production factors being far from fully utilized. Moreover, significant structural and institutional bottlenecks continue to curtail Bulgaria’s growth potential. Enterprise access to bank financing is low and corporate governance remains weak. Foreign direct investment and exports are still concentrated in more traditional sectors, and the quality of the institutions and the business climate falls short of what is needed to support a dynamic private sector.
4. Bulgaria’s growth experience is not unique, and the policies that have proved successful in stimulating growth in the transition economies as a whole offer the best prospects for Bulgaria as well. A panel data regression covering all the European transition countries shows that Bulgaria’s growth experience during the first decade of transition has not been uncommon. As in the other transition countries, macroeconomic stabilization and structural reform have been the two key requirements to overcome the transformational recession and embark on the path of robust growth. To promote growth in the future, Bulgaria and the other transition countries are well advised to maintain sound macroeconomic policies, liberalize trade further, and make additional progress in structural and institutional reform. A comparative analysis also helps to identify areas where Bulgaria needs to make an extra effort. These include enterprise reform, energy sector restructuring, and increasing the economy’s export orientation.
5. Bulgaria can reach sustained growth of at least 5 percent per year, provided the proper macroeconomic and reform policies are in place and investment and effective labor input are raised. This study applies results from growth regressions for a large sample of market economies and a growth accounting exercise to quantify the conditions under which Bulgaria can achieve annual growth rates of at least 5 percent. The investment rate needs to increase to 20 percent, the employment and participation rates need to be raised, and human capital formation stimulated. In addition, total factor productivity (TFP) growth rates of around 2 percent per annum will be required. To achieve such high TFP growth and investment, strong and sustained efforts in structural and institutional reform will be indispensable.
B. Bulgaria’s Growth Experience So Far
6. The extensive growth model introduced under central planning in the 1950s resulted in rapid industrialization and initially high growth (Figures 1 and 2). Half a century ago, Bulgaria’s economy was still primarily agricultural, with per capita income around one third of that in the current EU members. In the late 1950s, the planning authorities launched a massive transformation program based on large-scale investment and labor reallocation from agriculture to industry (Jackson, 1991). The share of agriculture in employment fell from over 55 percent in 1960 to less than 25 percent in 1980, while the gross fixed capital stock quadrupled in real terms during this period.2 Within industry, the machinery branch was given priority, and its share in industrial employment rose from 17 percent in 1960 to 27 percent in 1980. This strategy of rapid industrialization was initially highly successful. Annual growth in the second half of the 1960s and the first half of the 1970s averaged 5 percent in the economy as a whole and over 7 percent in industry.3 With total employment growth averaging less than 1 percent annually, most of the aggregate growth was accounted for by labor productivity gains, around half of which stemming from sectoral reallocation of labor. Growth also benefited from increasing economic integration with the Soviet Union, which was willing to supply raw materials and energy at below-market prices and to absorb part of Bulgaria’s industrial production. As a result of rapid growth during the initial industrialization phase, in 1975 Bulgaria had narrowed the income gap with the EU15 countries to around 50 percent (Maddison, 1995, and UNECE, 2000).
Bulgaria: Sectoral Employment Shares, 1964-99
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.
Bulgaria: Sectoral Employment Shares, 1964-99
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.Bulgaria: Sectoral Employment Shares, 1964-99
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.
Bulgaria: Labor Productivity, 1964-99
(Aggregate in 1964 = 100)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.
Bulgaria: Labor Productivity, 1964-99
(Aggregate in 1964 = 100)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.Bulgaria: Labor Productivity, 1964-99
(Aggregate in 1964 = 100)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.7. The growth model based on industrialization and high investment had exhausted its potential by the early 1980s.4 By the mid-1970s, the scope for shifting labor from agriculture to industry had narrowed substantially, and diminishing returns to capital accumulation had set in. Between 1975 and 1985, annual output growth fell to less than 1 percent on average, almost entirely on account of weak growth of labor productivity, while growth in industry slowed to an annual average of below 3 percent. During the final years under central planning, 1986 to 1989, no growth was recorded at either the aggregate or industry level, and labor productivity stagnated. In 1989, the last pre-reform year, per capita income in Bulgaria had fallen back to 40 percent of the EU15 average.
8. Unable to change course when faced with increasing economic pressures in the 1980s, the authorities resorted to massive external borrowing. Confronted with the challenge of generating growth through improvements in total factor productivity rather than from sectoral reallocation of labor combined with capital accumulation, the communist authorities considered various economic reform plans (Jackson, 1991). As these reform efforts failed, the distortions from the strategy to pursue rapid industrialization and integration with the Soviet economy widened. Unable to improve the quality of its manufacturing output and to compete in other markets, Bulgaria in the 1980s became increasingly dependent on exports to the Soviet Union, which at the same time was a source of cheap energy imports. While growth in output and labor productivity stagnated, the energy intensity of the economy continued to increase. Under pressure to meet rising consumer expectations, the central planners cut back investment spending by almost 10 percent in real terms in between 1980 and 1989, and they borrowed heavily in convertible currencies in the final years under central planning. Between 1985 and 1989, Bulgaria’s gross external debt in convertible currencies tripled, to US$9.2 billion.5
9. The collapse of central planning in 1990 was associated with a sharp contraction in output, employment, and investment.6 The move to a market economy, which began in 1990, was marked by a deep transformational recession. Real GDP fell by almost 30 percent in the first three years of the transition. The depth of the output fall varied substantially across sectors, and was most pronounced in industry and construction. Massive output declines with a similar sectoral pattern were also observed in the other transition countries. The decline in Bulgaria was, however, much more pronounced than that in the central European countries, as Bulgaria was more affected by the break-up of the CMEA (the origin and destination of most of its pre-transition trade) and by the price increases on energy imports from the former Soviet Union. Bulgaria also suffered from the conflict in the former Yugoslavia and loss of markets in Iraq and Libya. The transformational recession was accompanied by major contractions in employment and investment. During 1990–92, employment in the economy fell by about 25 percent and in industry by over 35 percent. In the same period, real investment at both the aggregate and the industry levels declined by more than one half. These contractions reduced the excess employment and redundant capacity inherited from central planning, cushioning the impact of the output decline on productivity.
10. Stop-and-go macroeconomic policies in the early 1990s and a lack of progress in structural reform prolonged the transformational recession and further eroded Bulgaria’s productive potential. The inability of successive governments in the first half of the 1990s to implement sound macroeconomic policies and pursue ambitious structural reforms prevented the economy from achieving more than a shallow recovery (for an analysis of the policy failures in this period, see Mihov, 1999). Real GDP growth turned positive again in 1994–95, but the cumulative increase of 4 percent fell short of that in the central European countries, and allowed Bulgaria to regain only a small fraction of the previous output losses. Moreover, the weak macroeconomic policies and lack of structural reform resulted in a severe financial and foreign exchange crisis in 1996–97. This crisis caused another deep output decline, to the tune of 17 percent. As a result, Bulgaria lost further ground to the more advanced transition economies in central Europe (where, with the exception of the Czech Republic, the recovery had continued) and saw output fall to less than 65 percent of its level in 1989. The unfavorable economic environment in the early 1990s and the 1996–97 crisis also had a negative impact on the factors of production, and eroded productivity further. Between 1992 and 1997, total employment declined by 4 percent, while employment in industry dropped by almost 18 percent. In this period, agriculture absorbed part of the labor made redundant in industry, and agricultural employment rose both in absolute numbers and as a share of total employment, reversing a decades-long trend and negatively affecting productivity in the economy as a whole. Investment in real terms fell by over 40 percent in the economy as a whole and by more than 60 percent in industry. As a ratio to GDP, fixed capital formation bottomed out at less than 12 percent in 1997.
11. The stabilization and structural adjustment policies implemented by the government since 1997 have brought about a renewed recovery (Figure 3). The new government that came into power in 1997 adopted sound macroeconomic policies centered on a currency board arrangement and initiated an ambitious structural reform program. These policies were instrumental in the resumption of positive growth in 1998. Real GDP increased by 11 percent in the three years through 2000, despite unfavorable external developments, including the global financial crises and a war in neighboring Kosovo. Growth became broad based as the sharp differences in sectoral growth rates that had marked the 1996–97 crisis gave way to a more even sectoral growth pattern. On the input side, the reallocation of labor from industry back to agriculture came to a halt, and fixed capital formation began to pick up again. Reflecting a volume increase of more than 80 percent since 1997, gross fixed investment rose to above 16 percent of GDP in 2000.
Bulgaria: Contributions to Real Output Growth, 1995-99
(In percent)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: OECD, NSI, and staff estimates.
Bulgaria: Contributions to Real Output Growth, 1995-99
(In percent)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: OECD, NSI, and staff estimates.Bulgaria: Contributions to Real Output Growth, 1995-99
(In percent)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: OECD, NSI, and staff estimates.12. The broad pattern of changes in the factors of production and productivity indicate that the reallocation and restructuring process in Bulgaria is far from complete (Figures 4 and 5). The period of intensified structural reform since 1997 has been too short to enable Bulgaria to regain the ground lost during the initial transition years in reallocating resources and restructuring.7 Bulgaria has made significant progress in reallocating labor and investment to the services sector, which was underrepresented under central planning. The sector’s share in total employment rose from around 35 percent in 1989 to around 45 percent in 1999. But the absorption capacity in the services sector was too limited to cope with the large employment reduction in industry and construction, which led to a flow of labor back to agriculture and a sharp increase in unemployment.8 Restructuring efforts within each of the major sectors have yet to result in substantial labor productivity gains. Bulgaria has in this regard lagged other EU accession countries that have managed to boost labor productivity significantly since the end of the transformational recession in 1993. The performance in industry and the services sector—where productivity developments in part reflect the collapse in financial activity in 1996–97—in particular fell short of that in other countries. The more limited progress in reducing energy intensity is further evidence that Bulgaria’s restructuring process is incomplete.
Labor Productivity in Selected EU Accession Countries, 1993-99
(1993=100)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.
Labor Productivity in Selected EU Accession Countries, 1993-99
(1993=100)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.Labor Productivity in Selected EU Accession Countries, 1993-99
(1993=100)
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.
Energy Intensity in Selected EU Accession Countries, 1992 and 1999
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Sources: U.S. Department of Energy, and IMF staff calculations.
Energy Intensity in Selected EU Accession Countries, 1992 and 1999
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Sources: U.S. Department of Energy, and IMF staff calculations.Energy Intensity in Selected EU Accession Countries, 1992 and 1999
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Sources: U.S. Department of Energy, and IMF staff calculations.13. The restructuring of manufacturing and reorientation of trade are also still at a relatively early stage (Figure 6). Labor productivity developments in individual branches of manufacturing do not yet show major gains overall or pronounced differences across branches, suggesting that only limited active restructuring has taken place.9 Transition countries where restructuring in manufacturing is more advanced typically report sizable productivity improvements for the sector as a whole and a distinct uneven pattern, with the strongest improvements in the more technology-intensive machinery and equipment branches Unlike Bulgaria, the central European transition countries are narrowing remaining structural differences in the composition of their manufacturing sector relative to current EU members (Landesmann, 2000). As a result of the only limited productivity gains in more technology-intensive branches, Bulgaria has been unable to diversify its export structure beyond labor-intensive products and energy- and resource-intensive commodities (Havlik, 2000). This lack of diversification has also negatively affected export performance overall. Following a rapid increase in the early 1990s in the wake of the removal of trade distortions from central planning, exports have failed to grow beyond the US$5 billion level reached in 1995.
Labor Productivity in Manufacturing in Selected EU Accession Countries, 1992-99
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.
Labor Productivity in Manufacturing in Selected EU Accession Countries, 1992-99
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.Labor Productivity in Manufacturing in Selected EU Accession Countries, 1992-99
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Source: National Statistical Authorities, and IMF staff calculations.C. Are the Foundations for Sustained Growth Already in Place?
14. Despite the remarkable turnaround since 1997, conditions for self-sustained growth appear not yet to be fully in place. From the demand side, the growth pattern in recent years has reflected a rebound from the 1996–97 crisis and a response to external developments. Signs that the economy has entered a new phase marked by self-sustained growth in domestic demand are only beginning to emerge. Evidence from the supply side also suggests that the economy is still in a recovery phase, as there are no signs that the factors of production are being fully used. However, the supply side conditions for growth have improved as a result of the ambitious reform agenda implemented since 1997. Banking sector reform and a wave of privatizations have strengthened the incentives for restructuring. A significant increase in foreign direct investment (FDI) is helping to raise productivity in the economy. But significant structural and institutional bottlenecks remain. Enterprise access to outside financing is low, and corporate governance weak. Moreover, FDI continues to be concentrated in the traditional sectors, and the quality of the institutions and the business environment falls short of what is needed to support a dynamic private sector.
15. Aggregate demand growth in recent years has been driven mainly by the rebound from the 1996–97 crisis and external factors. Fixed capital formation began to pick up in 1995, suggesting an incipient recovery from the initial transformational recession. This recovery was interrupted by the 1996–97 crisis, which was associated with a sharp contraction in investment and a fall in consumption. Marking a rebound from the crisis, fixed investment and consumption growth turned positive again in 1998. More recently, movements in aggregate demand have mainly reflected external developments. The Kosovo crisis in early 1999 had a negative impact on net external demand, while strong growth in the main EU markets in 2000 provided a boost to exports that more than offset the impact of higher oil prices on imports. A robust increase in fixed capital formation in 2000 may, however, signal that domestic demand is about to take over as the main source of growth on the demand side.
16. A look at the supply side also suggests that the economy has not yet advanced to the point where growth is taking on a more self-sustained character. Recent growth still appears to reflect an ongoing recovery from the output contractions during 1990–97 rather than the beginning of a new phase of more self-sustained growth. With a cumulative decline in employment since 1989 that broadly tracked that in output, aggregate labor productivity in 2000 was not higher than at the onset of the transition, when labor hoarding was considered to be widespread. At 18 percent at end-2000, unemployment remains very high. Finally, while low investment rates during most of the 1990s have resulted in a reduction in the capital stock, this reduction for other than infrastructure assets appears not to have gone beyond eliminating excess capacity that had been rendered obsolete by the transition to a market economy. On these grounds, it would seem incorrect to conclude that production factors were near being fully used by 2000.
17. The efforts to bring the banking system on a sound footing following the 1996–97 crisis have hardened budget constraints, but they have yet to result in a reorientation of banking sector activities toward private sector lending.10 Until 1996, banks’ willingness to lend at negative real interest rates and their tolerance of nonperforming loans led to major distortions in enterprise behavior and eroded the incentives for restructuring. The post-crisis banking sector reform has eliminated these problems: the share of standard loans in banking lending portfolios rose from below 50 percent at end-1996 to over 90 percent at end-2000. The shift toward prudence in lending activities has, however, left many firms—small and medium-size enterprises in particular—without access to external financing, and has kept spreads between lending and deposit rates at near 10 percent. A questionnaire administered to more than 200 Bulgarian SMEs revealed that a lack of credit and high lending rates were two of the top five operational constraints (Pissarides et al., 2000).11 Only a third of the surveyed firms reported having received a loan from a financial institution in the preceding three years. While operating under an external financing constraint, firms typically reinvested profits to expand production.
18. The substantial increase in the share of privately owned enterprises brought about by the renewed privatization efforts since 1997 is having a positive impact on firm performance. As a result of the strategy to accelerate privatization, Bulgaria has largely caught up in terms of private sector share in GDP with the other EU accession candidates, except the most advanced ones. The shift to private ownership is overall having a beneficial effect. In line with the findings for other transition countries (Djankov and Murrell, 2000), two recent studies using firm level panel data from a large sample of Bulgarian enterprises show that introducing private ownership improves productivity (Angelucci et al., 2000; and Dobrinsky et al., 2000). In particular, privatizing a fully state-owned enterprise to domestic private investors is found to raise total factor productivity by on average 29 percent. According to these studies, the efficiency enhancing effect from privatization holds at both the aggregate level and in most sectors.
19. The beneficial effects from privatization in Bulgaria fall short of their potential, however, as in some sectors the market environment is not fully competitive, and in a range of enterprises corporate governance is not exercised properly. Angelucci et al. show that in some sectors competitive pressure, as measured by product market concentration, has not yet reached the level needed to have private ownership induce better firm performance. Similarly, corporate governance remains generally weak, in particular in enterprises that have been privatized through the mass privatization program or management-employee buy-outs (MEBOs). Such enterprises comprise a significant part of Bulgaria’s private sector, reflecting the nature of the country’s privatization programs (Box 1). Recent survey data show that restructuring in enterprises privatized through MEBOs has lagged that in enterprises acquired by domestic and foreign strategic investors, and in some cases significant asset stripping has taken place. These survey data also show that nearly all the enterprises privatized through MEBOs have retained the same management team and that they rank behind domestic and foreign strategic investors in terms of average investment commitments. Governance problems have also arisen in enterprises privatized through the mass privatization program. The bulk of the vouchers issued during the first wave of the program have been collected by investment funds which have built up substantial shareholder positions in a range of enterprises. However, the control exercised by these investment funds is limited, which is reflected in the low valuation of their shares relative to the annual earnings of the underlying portfolio (Miller and Petranov, 2000). Investment funds and other external shareholders face considerable difficulties in removing inefficient managers. The market for managers is shallow and sectorally and regionally segmented. Moreover, incumbent managers often have the support from other stakeholders in the enterprise, including labor unions and local authorities.
Issues in Mass and Large-Scale Privatization in Bulgaria
Mass privatization: Several variants of the mass privatization program (MPP) were debated through 1993, in response to the insufficient progress with cash privatization. In 1994, amendments to the Privatization Act were introduced to regulate the use of vouchers and provide for the creation of the Center for Mass Privatization (CMP), with the responsibility for carrying out the voucher privatization program. The MPP remained a long time under consideration, and was only launched in 1996. In its design, it was modeled on the Czech variant of voucher privatization, and was prepared with the help of Czech consultants. The Czech and the Bulgarian programs differed, however, in their scope.
Contrary to the experience in the Czech Republic, voucher privatization did not become the main privatization channel in Bulgaria. Registration of vouchers began on January 8, 1996. By June 9, when the registration finally ended, only about 3 million people, or about half of all those eligible, had collected their vouchers. To a large extent, this was due to the fact that Bulgaria’s fiscal position was deteriorating continuously, and that the increasingly cash-strapped government was reluctant to forgo an excessive amount of potential revenue from privatization receipts. During the first wave of privatization (June 20, 1996 to February 21, 1997), vouchers amounting to 75 billion leva were issued. The bulk of them (81 percent) were invested in privatization funds, participating in central auctions organized to sell approximately a sixth of the long-term assets (LTA) of state enterprises. Privatization funds were eligible to buy up to a third of the shares in any given company, a strategic stake under Bulgarian corporate law. By end-1997, 14 percent of LTA had been transferred to the private sector through mass privatization.
The second wave of mass privatization was launched in early 1999, and is now well underway. More than one million Bulgarians have participated in it, and the CMP has organized 14 public tenders since the beginning of 1999. Some 12.5 million shares from 547 companies were put up for sale at these tenders, with an average of 54 percent bought. The government intends to use this second wave to sell a large number of SMEs and to dispose of residual shares owned by the state. It will also use it to launch private pension funds. Finally, this second wave could have a positive on effect on the stock exchange. The impact on the pace of privatization is difficult to quantify, however, as there is no clearly defined list of assets available for mass privatization. Moreover, the take-up rate by eligible citizens is not known in advance, and vouchers are also issued in conjunction with land or commercial property restitution.
Large Enterprise Privatization: Large-scale privatization, carried out by the Privatization Agency (PA), has proceeded mainly through negotiation with potential buyers. The other methods stipulated in the Privatization Act (auctions and tenders, direct offer to MEBOs) were only marginally used. Privatization intermediaries were appointed to find buyers for about 13 percent of enterprises. However, the recent amendments to the Privatization Law led to a change in management of the PA. In December 2000, the new director announced that from then on other methods, including auctions and tenders, would be more widely used, in line with the new privatization strategy.
MEBOs and local investors were the main buyers, with only a relatively small share of large enterprises acquired by foreign strategic investors. Foreign investors however paid an average price more than three times higher than local investors and five times higher than MEBOs. In terms of privatization proceeds, foreign investor participation was thus much larger than implied by the small number of deals concluded.
Investment commitments and employment arrangements were incorporated in nearly 90 percent of PA deals, and obligations to pay off debt provisions in one third of the cases. Such noncash provisions in the privatization contracts allow the PA to monitor and intervene in post-privatization corporate management, up to five years following the execution of the deal. The PA can, for example, cancel a privatization contract with a buyer due to nonfulfillment of noncash provisions. These arrangements can potentially slow down the restructuring process, as many privatized companies seek to amend them in the post privatization period.
20. Foreign direct investment in Bulgaria has increased considerably in recent years, providing a boost to productivity. As a result of macroeconomic stabilization and renewed privatization efforts, FDI inflows rose from little more than US$100 million in 1996 to a record US$1 billion in 2000, with privatization-related inflows accounting for almost half of the total. The FDI stock exceeded US$3 billion at end-2000, up from less than US$500 million four years earlier. As in other transition countries, FDI acts as a channel for the transfer of technological and management know-how, and provides financing for investment in rehabilitation and new capacity. Studies using firm level data clearly show that Bulgarian firms with foreign participation are more efficient than those with only domestic—state or private—ownership (Angelucci et al., 2000; and Konings, 1999). Controlling for other factors, total factor productivity in a fully foreign-owned enterprise is found to be on average 45 percent higher than in state-owned domestic firms, and 12 percent higher than in private domestic firms.
21. Despite the increased inflows in recent years, the level and composition of FDI in Bulgaria still falls short of what is needed to make FDI a main engine of growth. At less than US$400 at end-2000, Bulgaria’s FDI stock in per capita terms is still significantly below that of the other EU accession countries, with the exception of Romania. Compared with the more advanced transition countries in central Europe, the share of EU investors is smaller and that of investors from neighboring non-EU countries larger. These countries, however, tend to be less rich in mobile capital and experienced multinational enterprises (Hunya, 2000). Bulgaria also lags the more advanced transition countries in attracting knowledge-and capital-based FDI, and manufacturing FDI remains concentrated in resource-and labor-intensive branches. Finally, while foreign investors are increasingly launching greenfield projects, they have as yet shown little interest in taking over and restructuring inefficient privatized enterprises.
22. The quality of the institutions underpinning the market economy and the business climate continues to suffer from significant shortcomings. While the authorities have made major efforts to put in place a market-oriented legal and regulatory framework for conducting business, significant problems in implementing this framework remain. EU and World Bank reports continue to point out problems of administrative obstacles to doing business, and weak enforcement of laws and regulations. EBRD Transition Indicators and surveys among international investors and economic experts typically rank Bulgaria behind the other EU accession candidates—except Romania—in the overall quality of domestic institutions (for an overview, see Weder, 2000). The detailed 1999 Business Environment Performance Survey administered by the EBRD and the World Bank to local enterprises similarly revealed that more remains to be done in institutional reform in Bulgaria (Hellman and Schankerman, 2000). Bulgaria (and Romania) lagged the other EU candidate countries in such areas as government capture (private influence on the formation of laws and regulations), the frequency of bribing public officials to avoid taxes and regulations, and the efficiency of government services. Bulgaria (and Romania) also scored low in terms of the proper functioning of the legal system, the quality of the judiciary, and the security of contracts and property rights. Legal and regulatory implementation and enforcement problems are reflected in the significantly larger size of Bulgaria’s shadow economy compared with more advanced EU accession candidates (Eliat and Zinnes, 2000). Institutional weaknesses hinder the development of a vibrant SME sector and, by negatively affecting country risk, form an obstacle to attracting a sustained high level of FDI in a diversified range of activities.
D. Is Bulgaria’s Growth Experience Unique?
23. This section reports on a panel regression exercise to assess Bulgaria’s growth experience relative to other transition economies. The regression results indicate that the same factors of recovery and growth that have been dominant in other transition economies have also been in play in Bulgaria. In particular, prudent fiscal policy, trade liberalization, and enterprise restructuring are key to raising growth potential in Bulgaria, as well as in other transition countries. Orienting production toward exports and improving energy efficiency will also help to improve growth prospects.
24. To capture the main determinants of growth in transition economies, a simple regression model is used. The model is estimated using data from 1991–99 covering all transition countries in Europe and the former Soviet Union.12 The dependent variable is output growth. Explanatory variables consist of macroeconomic and structural variables that are widely used in similar studies.13 The macroeconomic variables are the general government fiscal balance and inflation. The structural variables include EBRD indexes of foreign exchange and trade liberalization, price liberalization, small- and large-scale privatization, and enterprise reform. To capture product orientation, the ratio of export growth to GDP growth and private sector share in the economy are included. Given the importance of the energy sector in Bulgaria, a variable capturing the intensity of energy consumption to GDP is also included in the regressions. Lags up to 2 years and differenced variables are considered.
25. Initial conditions are estimated, rather than specified by a set of variables. In empirical studies that focus on growth in the first decade of transition, initial conditions have received substantial attention. Most of these studies have used several structural and macroeconomic variables to capture the initial conditions, with the view that these conditions have an impact on the size and length of the transformational recession and on the recovery patterns in later years. In this study, however, the initial conditions are estimated by panel data fixed effects coefficients. The reason for such estimation is twofold. First, this study focuses on the impact of reforms and other policies during transition on recovery and growth; capturing the forces underlying the initial output decline is secondary. This focus on the more recent growth experience is facilitated by the fact that more time series data relative to many of the earlier studies are available on each country. Second, this approach allows more flexibility in the model through the estimation of country-specific characteristics. However, the fixed effects should not be interpreted as initial conditions, because the estimated coefficients not only include the initial conditions, but also country specific differences in average growth not explained by the right-hand-side variables.
26. The results are generally in line with the conclusions of other similar studies (Table 1). The strongest result is that more trade and foreign exchange liberalization leads to higher growth. The coefficient of that variable is strongly positive, and explains more than 50 percent of the variation in the sample. Enterprise reform also has a significant positive impact on growth. Besides these structural variables, the positive and significant coefficient of the ratio of export growth to GDP growth implies that countries with a strong export orientation tend to grow rapidly. The regression also captures the negative correlation between the intensity of energy consumption and output growth. This suggests that countries which do not improve their energy efficiency tend to grow more slowly than those which do. Regarding macroeconomic variables, lower fiscal deficits are associated significantly and positively with higher growth. However, no significant impact of inflation on output growth was evident, contrary to results in several other studies in this area. Therefore, inflation was not included in the final model. The index of financial sector liberalization was also eliminated at the final estimation stage, because intermediate results captured a positive but weak link between such liberalization and output growth.14 Likewise, the share of private sector in output, price liberalization, and small enterprise privatization seemed to have a weak impact on growth. These results are likely to be attributable more to high multicollinearity between these variables and other structural variables than to lack of any link between such reforms and growth.
Bulgaria: Growth Regression Results on Transition Countries, 1991–1999 1/
Dependent variable is GDP growth. These results are obtained using the standard panel data fixed effects method.
Bulgaria: Growth Regression Results on Transition Countries, 1991–1999 1/
| Coefficient | t-statistic | Probability | |
|---|---|---|---|
| General government balance (in percent of GDP) | 0.38 | 3.72 | 0.00 |
| Index of trade and foreign exchange liberalization | 3.78 | 3.37 | 0.00 |
| Index of enterprise reform | 2.66 | 1.65 | 0.10 |
| Intensity of energy consumption (in percent) | −1.40 | −1.90 | 0.06 |
| Ratio of export growth to GDP growth (lagged once, in percent) | 0.05 | 3.92 | 0.00 |
| R-squared: 0.59; Adjusted R-squared: 0.52 | |||
| F-statistic: 60.2; Prob(F-statistic): 0.0 |
Dependent variable is GDP growth. These results are obtained using the standard panel data fixed effects method.
Bulgaria: Growth Regression Results on Transition Countries, 1991–1999 1/
| Coefficient | t-statistic | Probability | |
|---|---|---|---|
| General government balance (in percent of GDP) | 0.38 | 3.72 | 0.00 |
| Index of trade and foreign exchange liberalization | 3.78 | 3.37 | 0.00 |
| Index of enterprise reform | 2.66 | 1.65 | 0.10 |
| Intensity of energy consumption (in percent) | −1.40 | −1.90 | 0.06 |
| Ratio of export growth to GDP growth (lagged once, in percent) | 0.05 | 3.92 | 0.00 |
| R-squared: 0.59; Adjusted R-squared: 0.52 | |||
| F-statistic: 60.2; Prob(F-statistic): 0.0 |
Dependent variable is GDP growth. These results are obtained using the standard panel data fixed effects method.
27. The estimated model explains Bulgaria’s recent output growth path fairly well (Table 2). The residuals are mostly within the margin of error. The exceptions in 1996–97 are in line with expectations, as they reflect idiosyncratic events in Bulgaria, namely a severe banking and foreign exchange crisis. While there does not seem to be a general systematic bias in the residuals, growth in the earlier years is underpredicted. The model predicts output growth since the 1996–97 crisis well.
Bulgaria: Fitted and Actual Growth Paths, 1992–1999 (In percent)
Bulgaria: Fitted and Actual Growth Paths, 1992–1999 (In percent)
| 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | |
|---|---|---|---|---|---|---|---|---|
| Actual growth | −7.3 | −1.5 | 1.8 | 2.1 | −10.9 | −6.9 | 3.5 | 2.4 |
| Fitted growth | −10.3 | −9.3 | −1.0 | −1.7 | −2.6 | 1.5 | 3.2 | 3.4 |
| Residual | 3.0 | 7.8 | 2.8 | 3.8 | −8.3 | −8.4 | 0.3 | −1.0 |
Bulgaria: Fitted and Actual Growth Paths, 1992–1999 (In percent)
| 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | |
|---|---|---|---|---|---|---|---|---|
| Actual growth | −7.3 | −1.5 | 1.8 | 2.1 | −10.9 | −6.9 | 3.5 | 2.4 |
| Fitted growth | −10.3 | −9.3 | −1.0 | −1.7 | −2.6 | 1.5 | 3.2 | 3.4 |
| Residual | 3.0 | 7.8 | 2.8 | 3.8 | −8.3 | −8.4 | 0.3 | −1.0 |
28. The policy message from this analysis is clear. Bulgaria is no special case: policies that have been beneficial for growth in other transition countries work in Bulgaria as well.15 Hence, part of the economic recovery since 1997 can be attributed to improved policies under the currency board arrangement. To promote rapid growth in future, the Bulgarian authorities would be well advised to continue with prudent fiscal policy, trade liberalization, and enterprise restructuring. Orienting production toward exports and improving energy efficiency will also help to improve Bulgaria’s growth prospects. Figure 7 shows Bulgaria’s relative position among the EU accession countries in these areas. While Bulgaria scores high in fiscal prudence and trade liberalization, it has some catching up to do in other areas.
Bulgaria: Factors of Growth in Selected Transition Economies, 1999-2000
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Sources: EBRD, U.S. Department of Energy, and IMF staff calculations.
Bulgaria: Factors of Growth in Selected Transition Economies, 1999-2000
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Sources: EBRD, U.S. Department of Energy, and IMF staff calculations.Bulgaria: Factors of Growth in Selected Transition Economies, 1999-2000
Citation: IMF Staff Country Reports 2001, 054; 10.5089/9781451804409.002.A001
Sources: EBRD, U.S. Department of Energy, and IMF staff calculations.E. Bulgaria’s Long-Term Growth Potential
29. This section estimates Bulgaria’s long-term growth potential based on two approaches. The results from both approaches suggest that the growth rates of 5–5½ percent targeted by the authorities are feasible, but require major efforts. The first approach uses growth regressions for a large sample of market economies. The analysis suggest that Bulgaria could sustain annual GDP growth at about 5 percent if it raises the investment rate from the present 16 percent to about 20 percent and steadily improves its institutions to the standards reached by the most advanced transition countries. The second approach is based on growth accounting. It highlights three factors that are crucial for sustained GDP growth of 5 percent or more: (i) investment rates of 20 percent or more to achieve capital accumulation rates comparable to those of other accession countries, (ii) increases in the employment rate, the participation rate, and human capital to raise the effective labor input and offset the impact of negative demographics, and (iii) continued structural reforms to achieve annual growth in total factor productivity (TFP) of about 2 percent.
Growth regression approach
30. Cross-country regressions based on the extended neoclassical growth model relate a country’s medium-term per capita growth to its initial productivity level, investment rates in human and physical capital, and the population growth rate. The model predicts that the higher the investment rates and the lower the population growth rate, the higher the steady-state per capita output and the projected growth rate will be, for a given initial per capita output (Barro, 1991; and Levine and Renelt—hereafter LR—1992). This approach is consistent with the conditional convergence hypothesis, according to which poorer countries catch up with richer ones, conditional on their investment rates in human and physical capital (Mankiw, Romer, and Weil, 1992). By contrast, once countries reach their steady states, output per worker is assumed to grow at the exogenous rate of technical progress.
31. Applied to transition countries, this approach has a number of shortcomings, including measurement problems for human capital and the informal sector, and the omission of institutional quality. The coefficients in the benchmark Barro (1991) and LR (1992) growth regressions were obtained using data for market economies. While these coefficients can in principle also be used to assess the longer-run growth prospects of transition economies, the results need to be interpreted carefully, for several reasons. First, school enrollment rates are quite high in these countries, but the skills acquired do not necessarily correspond to the needs of a market economy. Hence, using these rates as proxies for human capital investment, a standard practice in the growth regression literature, may result in an overestimation of the actual increase in the stock of human capital (Micklewright, 1999; EBRD, 2000; and Crafts and Kaiser—hereafter CK—2001). Second, the informal sector is usually quite large in transition countries. Ignoring this sector could lead to overstating the initial income gap, or the scope for catching up. Finally, the quality of institutions (as evidenced in property rights, governance, enforceability of contracts, etc.) is generally not up to market economy standards in countries which are still halfway through their reform agenda. Taking into account the negative effect of weak institutions on steady-state productivity would, as such, give lower growth projections.16 But including the quality of institutions in the growth equation also has indirect offsetting effects: it yields a higher coefficient for initial income (boosting the catch-up effect) and lowers the coefficients on investment and schooling (mitigating the effect of low investment rates). The net effect on growth projections may therefore be positive in some countries.
32. Given significant scope for catching up, annual GDP growth in Bulgaria could reach 5–5½ percent on a sustained basis, provided investment rates are raised to about 20 percent and the institutional quality gap with more advanced accession countries is closed. This conclusion is based on the application of the CK study to Bulgaria’s case, and can be derived as follows:
The baseline calculations in the CK study suggest sustainable growth rates in the 3–4 percent range, assuming unchanged investment rates and institutional quality. These calculations use data from 1998. At that time, Bulgaria’s per capita GDP (PPP adjusted) was the lowest of all EU accession candidates, and only one fourth of the EU average. Bulgaria also had by far the lowest investment rate of all accession candidates (12 percent, or less than half of the average), it lagged behind other accession candidates in institutional quality, and its secondary school enrollment rate at 77 percent was below the average. Based on these data and the assumption of unchanged investment rates and institutional quality, Bulgaria’s per capita growth is projected at 3.1–3.9 percent.17 The low estimate is based on an equation that adjusts for the informal sector but excludes institutional quality as an explanatory variable, while the high estimate is obtained by both adjusting for the informal sector and including institutional quality. If Bulgaria’s population continues to decline at the recent trend rate of 0.6 percent per annum, the growth rate of GDP would be lower by that amount. However, this analysis is based on unchanged investment rates and institutional quality. In 1999–2000, the investment rate had already risen to 16 percent. Institutional quality has also likely increased since 1998, given accelerated institutional and structural reform in the run-up to EU accession. Both factors have a considerable impact on growth projections.
A sustained increase in the investment rate to 20 percent raises the projected per capita growth rate to 4.7 percent.18 Given the likely continued decline in population, this yields a projected annual GDP growth rate of 4–4½ percent.
Closing the institutional quality gap with advanced accession countries could raise GDP growth further to 5–5½ percent. Based on the CK results, closing the institutional quality gap with Hungary and Slovenia would raise the projected growth rate by one percentage point. The projection would increase by 0.6 percentage points, if institutional quality was brought to the level of Poland, the Czech Republic, or Estonia in 1998.
Growth accounting approach
33. Long-term growth projections can also be obtained from a growth accounting exercise, based on projected TFP and factor growth. In this approach, a country’s long-term growth reflects its rate of factor accumulation and productivity gains. If there are no externalities to investment, the contribution of factor accumulation can be computed assuming elasticities with respect to capital and labor equal to their income shares, with the residual ascribed to productivity gains. This is the approach followed in most of the literature, including Bosworth and Collins (1996) and CK. Alternatively, one could obtain estimates of these elasticities using a regression of output growth on capital accumulation and labor force growth (for example, Benhabib and Spiegel, 1994). This second approach generally yields higher capital coefficients, on the order of 0.5 to 0.6, supporting the hypothesis that investment has positive externalities. These results should, however, be interpreted with caution, as they likely reflect simultaneity problems that are difficult to correct given the lack of adequate instruments for capital accumulation. In view of these uncertainties, this study follows the conventional approach, using assumed factor shares as estimates of the elasticities.
34. Based on growth accounting, potential growth in Bulgaria is in the range of 4 to 6 percent per year, depending on demographics, investment, and TFP growth assumptions (Table 3). Achieving GDP growth of about 5 percent requires (i) an increase in the investment rate to about 20 percent, (ii) continued restructuring and supporting economic policies to foster TFP growth of 2 percent per year, and (iii) increases in the labor force participation rate and the employment rate to outweigh the impact of adverse demographics (declining working-age population). Scenarios with even higher growth can be constructed, but they require extremely high investment rates to sustain the higher capital-output ratios. Hence, a realistic growth projection would be around 5 percent per annum, similar to that of other accession countries, with the greater scope for productivity gains in Bulgaria offsetting the effect of more negative demographics.19
Growth Prospects for Bulgaria Based on Growth Accounting
(In percent)
DY/Y=0.3*DK/K+0.7*DL/L+TFP, where Y: GDP growth, K: capital stock growth, L: labor input growth, TFP: TFP growth, and D: difference operator.
K1/Y1=(K0/Y0)*[1+(DK/K-DY/Y)/100]20, where K0: initial capital stock, and K1: capital stock 20 years from now.
GDI0: initial investment rate; GDI1: investment rate 20 years from now; GDIAV: average of initial and final investment rates.
Growth Prospects for Bulgaria Based on Growth Accounting
(In percent)
| DY/Y | DK/K | DL/L | TFP | DK/K- | Deprec. | K0/Y0 | GDI0 | K1/Y1 | GDI1 | GDIAV |
|---|---|---|---|---|---|---|---|---|---|---|
| 1/ | DY/Y | 2/ | 3/ | 2/ | 3/ | 3/ | ||||
| 6.0 | 11.7 | 0.7 | 2.0 | 5.7 | 5 | 1.5 | 25 | 4.5 | 76 | 50 |
| 5.5 | 11.7 | 0.0 | 2.0 | 6.2 | 5 | 1.5 | 25 | 5.0 | 83 | 54 |
| 4.8 | 8.3 | 0.5 | 2.0 | 3.5 | 5 | 1.5 | 20 | 3.0 | 39 | 30 |
| 4.5 | 8.3 | 0.0 | 2.0 | 4.5 | 5 | 1.5 | 20 | 3.6 | 48 | 34 |
| 4.0 | 5.7 | 0.4 | 2.0 | 1.7 | 5 | 1.5 | 16 | 2.1 | 22 | 19 |
DY/Y=0.3*DK/K+0.7*DL/L+TFP, where Y: GDP growth, K: capital stock growth, L: labor input growth, TFP: TFP growth, and D: difference operator.
K1/Y1=(K0/Y0)*[1+(DK/K-DY/Y)/100]20, where K0: initial capital stock, and K1: capital stock 20 years from now.
GDI0: initial investment rate; GDI1: investment rate 20 years from now; GDIAV: average of initial and final investment rates.
Growth Prospects for Bulgaria Based on Growth Accounting
(In percent)
| DY/Y | DK/K | DL/L | TFP | DK/K- | Deprec. | K0/Y0 | GDI0 | K1/Y1 | GDI1 | GDIAV |
|---|---|---|---|---|---|---|---|---|---|---|
| 1/ | DY/Y | 2/ | 3/ | 2/ | 3/ | 3/ | ||||
| 6.0 | 11.7 | 0.7 | 2.0 | 5.7 | 5 | 1.5 | 25 | 4.5 | 76 | 50 |
| 5.5 | 11.7 | 0.0 | 2.0 | 6.2 | 5 | 1.5 | 25 | 5.0 | 83 | 54 |
| 4.8 | 8.3 | 0.5 | 2.0 | 3.5 | 5 | 1.5 | 20 | 3.0 | 39 | 30 |
| 4.5 | 8.3 | 0.0 | 2.0 | 4.5 | 5 | 1.5 | 20 | 3.6 | 48 | 34 |
| 4.0 | 5.7 | 0.4 | 2.0 | 1.7 | 5 | 1.5 | 16 | 2.1 | 22 | 19 |
DY/Y=0.3*DK/K+0.7*DL/L+TFP, where Y: GDP growth, K: capital stock growth, L: labor input growth, TFP: TFP growth, and D: difference operator.
K1/Y1=(K0/Y0)*[1+(DK/K-DY/Y)/100]20, where K0: initial capital stock, and K1: capital stock 20 years from now.
GDI0: initial investment rate; GDI1: investment rate 20 years from now; GDIAV: average of initial and final investment rates.
35. The detailed assumptions underlying these projections are as follows:
The negative impact of Bulgaria’s demographics on the growth of labor input is more than offset by the impact of increases in human capital and the participation and employment rates. The projected decline in working-age population of 0.7 percent lowers GDP growth by one half of a percentage point, assuming a labor share of 70 percent. However, this calculation is based on unchanged participation and employment rates. Both have experienced a steep decline in Bulgaria: the participation rate fell from 86 percent in 1990 to 71 percent in 1999, and the employment rate from 85 to 59 percent. If the participation and employment rates recovered moderately (a full recovery has typically not happened in other transition countries), labor input would be broadly unchanged despite the declining working-age population. Moreover, improvements in human capital can also be expected, through learning by doing and through experience from working in a more market-oriented economy. This would raise effective labor input growth by about one half of a percentage point (Fernandez and Mauro, 2000). All in all, a modest growth in effective labor input of at least some ½ percentage point can be expected in Bulgaria.
The contribution of capital accumulation to GDP growth is 1½–2½ percentage points annually, corresponding to investment rates of 16–20 percent. In Bulgaria, as in other transition economies, even low investment-to-GDP ratios lead to relatively high capital accumulation, given the low initial level of the capital-output ratio. The capital-output ratio in 1989, the last pre-transition year, was 1.6. No precise estimates of the present capital-output ratio are available, but it is unlikely to be markedly lower than 1.6: although much of capital became obsolete at the onset of transition (as discussed in Borensztein and Montiel, 1991, and De Broeck and Koen, 2000) and the investment rate was low in the 1990s, output fell sharply during the first half of the decade and still remains some 30 percent below its 1989 level. For the purposes of this study, the present capital-output ratio in Bulgaria is assumed to be 1.5.20 With the present investment rate of 16 percent, this would imply capital growth of 5.7 percent per annum, assuming a depreciation rate equal to 5 percent.21 Based on a capital share of 0.3, the contribution to growth is 1.5 percentage points annually. A higher investment rate of 20 percent would yield projected capital growth of over 8 percent, with a contribution of 2.5 percentage points to GDP growth. In both scenarios, capital grows faster than output, leading to an increase over time in the capital-output ratio that needs to be sustained by higher investment rates. In the two scenarios, investment rates would need to increase over a 20-year period to about 20 and 40 percent, respectively.
Annual TFP growth is on the order of 2 percent, reflecting not only technical progress but also productivity gains from restructuring. For a large sample of developing countries during 1960–94, Bosworth and Collins (1996) find average TFP growth of about 2 percent per annum, provided appropriate policies and strong institutions are in place. The post-EU accession experiences of Greece and Ireland also suggest a potential for productivity gains of that order of magnitude (CK). In addition to FDI-related transfer of knowledge and innovations, productivity gains can result from the reallocation of capital and labor from low to high-productivity sectors—typically from agriculture to industry and services. This was the experience of more advanced transition countries. In Bulgaria, which is a late starter in transition, the scope for such productivity gains remains high. Agriculture still represented one fifth of GDP in 1999 and more than one-fourth of employment, while the share of services in both GDP and employment was less than 50 percent. There is also scope for substantial restructuring and efficiency gains at the firm level, as the high share of insider deals and weak corporate governance have slowed restructuring in newly privatized firms. Provided structural reforms continue apace, TFP growth can well be expected to reach 2 percent per year. However, it could be zero or even negative if institutional and economic reforms stall.
36. The authorities’ aspirations to join the EU should have a positive impact on TFP growth and private investment prospects, increasing the likelihood of high growth rates in the 5–5½ percent range. The prospect of EU membership can be expected to have a strong positive effect on the pace of reform in accession countries (Berglof and Roland, 2000). So far, the analysis has assumed that the impact of institutional reform on growth works only through TFP growth. But the impact could be even higher if potential positive effects on private investment were also taken into account. Institutional improvements can lead to higher investment by establishing a rules-based environment and thus lowering uncertainty below the threshold necessary for businesses to invest. There is both theoretical and empirical support for this hypothesis (see Serven, 1997, for a useful survey, and Mauro, 1995, and Poirson, 1998, for empirical cross-country evidence). Accelerated institutional reform would in this view allow Bulgaria to achieve simultaneously the objectives of high investment and TFP growth, required for high potential growth rates to materialize.
37. Bulgaria needs to sustain very high growth rates to achieve its goal of integration with Europe. The targeted rates around 5 percent appear high as such, but do not result in rapid convergence. Even with per capita growth of 5.5 percent, Bulgaria would take almost 50 years to close the income gap with the EU, assuming that per capita income in the EU grows at 2 percent per year on average.
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Prepared by Mark De Broeck, Tarhan Feyzioğlu, and Hélène Poirson.
Aggregate and sectoral capital stock data were published until the beginning of the 1990s. They were computed on a gross basis (the value of capital at the time it was put into operation, with no depreciation) and in nominal terms. Data in real terms can be computed using aggregate and sectoral implicit deflators. Employing the thus obtained series to derive TFP estimates gives results that are broadly similar to those based on labor productivity, but less robust. These TFP estimates are not reported in this study.
The pre-transition official data on growth suffer from major shortcomings, and they have to be interpreted with great caution. The official data refer to growth in Net Material Product, a concept different from GDP. Moreover, these data overstate growth significantly, as they do not correct for hidden inflation. Hence, in this paper the alternative, lower, growth estimates prepared by the Research Project on National Income in East Central Europe (see Alton, 1985, and the references cited therein) are used. This alternative series is available from 1965. The Bulgarian statistical authorities have taken major steps to improve the quality of the growth statistics since the beginning of the transition. However, the replacement of the central planning accounting system by the System of National Accounts and the introduction of a new sectoral classification in 1996 have made the construction of consistent long-run series difficult.
As discussed in Brixiová and Bulíř (2000), a similar growth slowdown was observed in the other centrally planned economies that had adopted this growth model.
This debt buildup may also have reflected other factors, including illicit transactions (Jackson, 1991).
Data on aggregate and sectoral growth, as well as on employment and investment, for 1991–2000 can be found in the Statistical Appendix tables.
Blanchard (1997) defines the transition process as being shaped by two main mechanisms: reallocation of resources—capital and labor—to the production of goods for which market-based demand exists, and restructuring aimed at bringing about efficiency gains.
Part of the decline in total employment has also been absorbed by withdrawals from the labor force, as reflected in a decline in the participation rate by 15 percentage points in the first decade of transition.
Active restructuring involves the upgrading of the composition and quality of products, the identification of new markets, and the implementation of new production processes, management techniques, and business strategies. In contrast, passive restructuring refers to the downsizing of production, employment, and capacity in response to the loss of traditional markets (EBRD, 1999).
This issue was covered in detail in Chapter III (“Why is Private Sector Credit So Low in Bulgaria?”) of last year’s Selected Issues Paper (SM/00/61, 3/20/00).
The survey was administered in 1995. Its results are likely to remain largely valid, however, as bank credit to the private sector in real terms is still significantly below its 1995 level, while lending rates in real terms are higher.
The panel data set covers 26 transition countries (Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, FYR Macedonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovak Republic, Slovenia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan) over 1991–1999. It consists of macroeconomic and structural variables drawn from EBRD (2000) and U.S. Department of Energy publications (International Energy Annual 1999).
For a comprehensive review, see Campos and Coricelli (2000).
A strong link between GDP per capita and banking sector development was found in Jaffee and Levonian (2000).
The policy lessons from the first decade of transition in these countries, as well as the policy agenda for the future, are discussed extensively in the October 2000 World Economic Outlook Report (International Monetary Fund, 2000).
See EBRD (1997), based on an equation taken from Knack (1996). The effect of institutional quality, measured by the World Bank rule of law indicator, is significant and higher than that of secondary school enrollment, even when instrumenting institutional quality to account for a potential simultaneity bias (CK). See also Knack and Keefer (1995) and Mauro (1995) for early cross-country empirical evidence of the effect of institutional quality and corruption on growth performance. These studies used expert ratings from country risk guides sold to foreign investors as measures of institutional quality, red tape, and corruption.
The per capita growth rates projected for Bulgaria are among the lowest that the CK study estimated for transition economies. The projected growth rate for Russia was comparable to that of Bulgaria, and only Albania and Georgia had lower rates.
The CK study considers the investment rate to be exogenous. However, as discussed in paragraph 36 below, higher investment rates are unlikely to materialize unless there is a further improvement in the quality of institutions.
In 1998, investment rates in other accession countries ranged from 20 percent in Latvia to more than 30 percent in the Czech Republic and the Slovak Republic, and their demographics were generally more favorable than Bulgaria’s. However, there is less scope in these countries for productivity gains from restructuring of the economy, as they are more advanced in the transition process. Potential growth should consequently be in the same range as Bulgaria, based on a similar analysis, but assuming somewhat lower TFP growth (in the range of 1–1½ percent per year).
This is consistent with available estimates of the Hungarian capital-output ratio at 1.72 (Darvas and Simon, 2000).
This relatively low depreciation rate is consistent with the assumption that an important part of the old capital stock was scrapped at the onset of transition. New investment is likely to depreciate at a relatively low rate.
References
European Bank for Reconstruction and Development (EBRD), 2000, Transition Report 1999.
European Commission, 2000, Regular Report from the Commission on the Progress Towards Accession by each of the Candidate Countries—Bulgaria.
International Monetary Fund (IMF), 1997, Trade Liberalization in Fund-Supported Programs, (EBS/97/163).
Kaminski, Bartlomiej, 2000, “The EU Factor in Trade Policies of Central European Countries”, Policy Research Paper no. 2239, (Washington: World Bank).
Michalopoulos, Constantine, 2000, “The Integration of Transition Economies into the World Trading System”, Policy Research Paper no. 2182, (Washington: World Bank).
Sharer, Robert and others, 1998, “Trade Liberalization in Fund-Supported Programs”, (Washington: International Monetary Fund).
World Trade Organization, 2000, Trade Policy Review of the European Union, (Geneva).
STATISTICAL APPENDIX
Bulgaria: National Accounts, 1991-95
(Old classification) 1/
In 1996, the classification of activities changed.
Including holding gains.
Bulgaria: National Accounts, 1991-95
(Old classification) 1/
| 1991 2/ | 1992 2/ | 1993 2/ | 1994 | 1995 | |
|---|---|---|---|---|---|
| (Gross value added at basic prices and GDP) | |||||
| (In current prices, in millions of leva) | |||||
| Agriculture and forestry | 20.9 | 23.3 | 29.7 | 60.4 | 111.4 |
| Industry | 53.91 | 78.4 | 97.71 | 157.4 | 272.7 |
| Manufacturing and mining | 46.06 | 63 | 75.45 | 120.9 | 212.5 |
| Construction | 6.35 | 11.7 | 16.16 | 25.1 | 41.6 |
| Other | 1.5 | 3.7 | 6.1 | 11.4 | 18.7 |
| Services | 69.5 | 92 | 151.7 | 272.4 | 450.2 |
| Trade | 11.8 | 18 | 26.6 | 52.9 | 101.8 |
| Transport | 7.4 | 10.1 | 13.9 | 25.2 | 37.5 |
| Communications | 1.6 | 2.4 | 4.8 | 8.8 | 12.2 |
| Other (non-material) | 48.7 | 61.5 | 106.4 | 185.4 | 298.7 |
| Taxes on products | 11.4 | 16.6 | 27.1 | 26.9 | 24.5 |
| Adjustments | -20 | -9.5 | -7.3 | 8.5 | 21.4 |
| GDP at market prices | 135.71 | 200.8 | 298.91 | 525.6 | 880.3 |
| Household consumption | 73.2 | 131.2 | 218.9 | 389.1 | 622.1 |
| Government consumption | 26.1 | 41.3 | 57.1 | 90.3 | 134.4 |
| Gross fixed capital formation | 24.6 | 32.6 | 38.7 | 72.3 | 134.3 |
| Changes in inventories | 6 | 7.4 | 7 | -23.0 | 3.5 |
| Net exports | 5.8 | -11.7 | -22.8 | -3.3 | -14.0 |
| Exports | 59 | 94.6 | 114.2 | 236.8 | 393.2 |
| Imports | 53.2 | 7 | 137 | 240.1 | 407.2 |
| Statistical discrepancy | … | … | … | … | … |
| (Growth rate in prices of previous year, in percent) | |||||
| GDP | -11.7 | -7.3 | -1.5 | 1.8 | 2.1 |
| Agriculture and forestry | 4.3 | -14.8 | -30.2 | 9.4 | 14.5 |
| Industry | -21 | -6.4 | -6.2 | 5.9 | -5.4 |
| Services | -26.9 | -20.7 | 0.6 | -3.1 | 4 |
| Household consumption | -15.7 | 1 | -0.7 | -2.6 | -1.8 |
| Government consumption | -10.3 | -14.6 | -12.6 | -11.5 | -7.4 |
| Gross fixed capital formation | -19.9 | -7.3 | -17.5 | 1.1 | 8.8 |
| (Percent change) | |||||
| Memorandum items: | |||||
| GDP implicit deflator | 238.6 | 59.6 | 15.1 | 72.7 | 64.1 |
| (In percent of GDP) | |||||
| Agriculture and forestry | 15.4 | 11.6 | 9.9 | 11.5 | 12.7 |
| Industry | 39.7 | 39.0 | 32.7 | 29.9 | 31.0 |
| Services | 51.2 | 45.8 | 50.8 | 51.8 | 51.1 |
| Taxes on products | 8.4 | 8.3 | 9.1 | 5.1 | 2.8 |
| Adjustment | -14.7 | -4.7 | -2.4 | 1.6 | 2.4 |
| Household consumption | 53.9 | 65.3 | 73.2 | 74.0 | 70.7 |
| Government consumption | 19.2 | 20.6 | 19.1 | 17.2 | 15.3 |
| Gross fixed investment | 18.1 | 16.2 | 12.9 | 13.8 | 15.3 |
| Net exports | 4.3 | -5.8 | -7.6 | -0.6 | -1.6 |
| Exports | 43.5 | 47.1 | 38.2 | 45.1 | 44.7 |
| Imports | 39.2 | 52.9 | 45.8 | 45.7 | 46.3 |
In 1996, the classification of activities changed.
Including holding gains.
Bulgaria: National Accounts, 1991-95
(Old classification) 1/
| 1991 2/ | 1992 2/ | 1993 2/ | 1994 | 1995 | |
|---|---|---|---|---|---|
| (Gross value added at basic prices and GDP) | |||||
| (In current prices, in millions of leva) | |||||
| Agriculture and forestry | 20.9 | 23.3 | 29.7 | 60.4 | 111.4 |
| Industry | 53.91 | 78.4 | 97.71 | 157.4 | 272.7 |
| Manufacturing and mining | 46.06 | 63 | 75.45 | 120.9 | 212.5 |
| Construction | 6.35 | 11.7 | 16.16 | 25.1 | 41.6 |
| Other | 1.5 | 3.7 | 6.1 | 11.4 | 18.7 |
| Services | 69.5 | 92 | 151.7 | 272.4 | 450.2 |
| Trade | 11.8 | 18 | 26.6 | 52.9 | 101.8 |
| Transport | 7.4 | 10.1 | 13.9 | 25.2 | 37.5 |
| Communications | 1.6 | 2.4 | 4.8 | 8.8 | 12.2 |
| Other (non-material) | 48.7 | 61.5 | 106.4 | 185.4 | 298.7 |
| Taxes on products | 11.4 | 16.6 | 27.1 | 26.9 | 24.5 |
| Adjustments | -20 | -9.5 | -7.3 | 8.5 | 21.4 |
| GDP at market prices | 135.71 | 200.8 | 298.91 | 525.6 | 880.3 |
| Household consumption | 73.2 | 131.2 | 218.9 | 389.1 | 622.1 |
| Government consumption | 26.1 | 41.3 | 57.1 | 90.3 | 134.4 |
| Gross fixed capital formation | 24.6 | 32.6 | 38.7 | 72.3 | 134.3 |
| Changes in inventories | 6 | 7.4 | 7 | -23.0 | 3.5 |
| Net exports | 5.8 | -11.7 | -22.8 | -3.3 | -14.0 |
| Exports | 59 | 94.6 | 114.2 | 236.8 | 393.2 |
| Imports | 53.2 | 7 | 137 | 240.1 | 407.2 |
| Statistical discrepancy | … | … | … | … | … |
| (Growth rate in prices of previous year, in percent) | |||||
| GDP | -11.7 | -7.3 | -1.5 | 1.8 | 2.1 |
| Agriculture and forestry | 4.3 | -14.8 | -30.2 | 9.4 | 14.5 |
| Industry | -21 | -6.4 | -6.2 | 5.9 | -5.4 |
| Services | -26.9 | -20.7 | 0.6 | -3.1 | 4 |
| Household consumption | -15.7 | 1 | -0.7 | -2.6 | -1.8 |
| Government consumption | -10.3 | -14.6 | -12.6 | -11.5 | -7.4 |
| Gross fixed capital formation | -19.9 | -7.3 | -17.5 | 1.1 | 8.8 |
| (Percent change) | |||||
| Memorandum items: | |||||
| GDP implicit deflator | 238.6 | 59.6 | 15.1 | 72.7 | 64.1 |
| (In percent of GDP) | |||||
| Agriculture and forestry | 15.4 | 11.6 | 9.9 | 11.5 | 12.7 |
| Industry | 39.7 | 39.0 | 32.7 | 29.9 | 31.0 |
| Services | 51.2 | 45.8 | 50.8 | 51.8 | 51.1 |
| Taxes on products | 8.4 | 8.3 | 9.1 | 5.1 | 2.8 |
| Adjustment | -14.7 | -4.7 | -2.4 | 1.6 | 2.4 |
| Household consumption | 53.9 | 65.3 | 73.2 | 74.0 | 70.7 |
| Government consumption | 19.2 | 20.6 | 19.1 | 17.2 | 15.3 |
| Gross fixed investment | 18.1 | 16.2 | 12.9 | 13.8 | 15.3 |
| Net exports | 4.3 | -5.8 | -7.6 | -0.6 | -1.6 |
| Exports | 43.5 | 47.1 | 38.2 | 45.1 | 44.7 |
| Imports | 39.2 | 52.9 | 45.8 | 45.7 | 46.3 |
In 1996, the classification of activities changed.
Including holding gains.
Bulgaria: National Accounts, 1996-2000
(NCEA. based on NACE, Rev. 1)
Preltminao data.
Includes: hotels and restaurants; real estate, renting and business activities, health and education; public administration and defense.
Bulgaria: National Accounts, 1996-2000
(NCEA. based on NACE, Rev. 1)
| 1996 | 1997 | 1998 1/ | 1999 1/ | 2000 1/ | |||
|---|---|---|---|---|---|---|---|
| Q1-Q3 | |||||||
| (Gross value added at basic prices and GDP) | |||||||
| (In current prices, in millions of leva) | |||||||
| Agriculture and forestry | 253.7 | 4,062.7 | 4,045.4 | 3,440.0 | 2,397.0 | ||
| Fishing | 0.7 | 6.2 | 7.1 | 7.0 | 8.0 | ||
| Industry | 497.9 | 4,316.3 | 5,508.8 | 5,326.0 | 4,510.2 | ||
| Mining and quarrying | 29.2 | 344.7 | 294.0 | 336.0 | 269.8 | ||
| Manufacturing | 345.8 | 2,857.6 | 3,664.3 | 3,303.0 | 2,864.3 | ||
| Electricity, gas and water supply | 52.6 | 689.3 | 832.9 | 950.0 | 783.9 | ||
| Construction | 70.2 | 424.6 | 717.6 | 737.0 | 592.3 | ||
| Services | 898.9 | 6,915.5 | 9,649.1 | 11,125.0 | 8,876.7 | ||
| Trade, repair of motor vehicles, personal | |||||||
| and household appliances | 179.6 | 1,304.9 | 1,470.3 | 1,486.0 | 1,336.4 | ||
| Transport | 92.6 | 814.4 | 1,025.7 | 959.0 | 913.3 | ||
| Communications | 30.6 | 340.6 | 551.6 | 778.0 | 778.8 | ||
| Financial intermediation and insurance | 143.9 | 398.2 | 407.2 | 585.0 | 520.9 | ||
| Other services 2/ | 452.2 | 4,057.3 | 6,194.3 | 7,317.0 | 5,327.4 | ||
| Total of economic activity groupings | 1,650.4 | 15,294.5 | 19,203.2 | 19,891.0 | 15,783.9 | ||
| Adjustments | 98.3 | 1,760.7 | 2,373.8 | 2,885.0 | 2,153.2 | ||
| GDP at market prices | 1,748.7 | 17,055.2 | 21,577.0 | 22,776.0 | 17,937.1 | ||
| Household consumption | 1,340.2 | 11,981.7 | 15,733.7 | 17,037.0 | 13,104.2 | ||
| Government consumption | 207.5 | 2,188.1 | 3,255.3 | 3,612.0 | 2,994.3 | ||
| Gross fixed capital formation | 238.5 | 1,841.0 | 2,850.8 | 3,632.0 | 2,659.0 | ||
| Changes in inventories | -91.6 | 100.8 | 785.6 | 707.0 | -64.0 | ||
| Net exports | 54.1 | 943.6 | 630.4 | -1,765.0 | -553.3 | ||
| Exports of goods and services | 1,100.0 | 10,555.9 | 10,360.9 | 10,054.0 | 10,894.9 | ||
| Imports of goods and services | 1,045.8 | 9,612.2 | 10,991.3 | 11,819.0 | 11,448.2 | ||
| Statistical discrepancy | 0.0 | 0.0 | -418.1 | -447.0 | -230.1 | ||
| (Growth rate in prices of previous year, in percent) | |||||||
| GDP at market prices | -10.1 | -7.0 | 3.5 | 2.4 | 5.3 | ||
| Agriculture and forestry | -7.4 | 32.9 | 1.4 | 0.6 | -15.5 | ||
| Industry | 11.8 | -11.3 | 4.3 | -4.4 | 12.0 | ||
| Services | -9.3 | -19.3 | 0.5 | 5.8 | 10.3 | ||
| Household consumption | -1.9 | -17.2 | 8.2 | 5.2 | 2.8 | ||
| Government consumption | -28.9 | -1.4 | 4.0 | 2.0 | 7.9 | ||
| Gross fixed capital formation | -21.2 | -23.9 | 32.9 | 25.3 | 9.8 | ||
| (Percent change) | |||||||
| Memorandum items: | |||||||
| GDP implicit deflator | 122.9 | 949.1 | 22.2 | 3.1 | 4.7 | ||
| (In percent of GDP) | |||||||
| Agriculture and forestry | 14.5 | 23.8 | 18.8 | 18.1 | 13.4 | ||
| Industry | 28.5 | 25.3 | 25.5 | 23.4 | 25.1 | ||
| Services | 51.4 | 40.5 | 44.7 | 48.8 | 49.5 | ||
| Total of economic activity groupings | 94.4 | 89.7 | 89.0 | 87.3 | 88.0 | ||
| Adjustments | 5.6 | 10.3 | 11.0 | 12.7 | 12.0 | ||
| GDP at market prices | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | ||
| Final consumption | 88.5 | 83.1 | 88.0 | 90.7 | 89.7 | ||
| Individual consumption | 82.8 | 76.9 | 79.8 | 82.3 | 80.1 | ||
| Households expenditures | 76.3 | 69.9 | 72.4 | 74.3 | 72.5 | ||
| NPISHs expenditures | 0.3 | 0.4 | 0.5 | 0.5 | 0.6 | ||
| Government expenditures | 6.2 | 6.6 | 6.9 | 7.5 | 7.1 | ||
| Collective consumption | 5.7 | 6.2 | 8.2 | 8.4 | 9.6 | ||
| Gross fixed capital formation | 13.6 | 10.8 | 13.2 | 15.9 | 14.8 | ||
| Changes in inventories | -5.2 | 0.6 | 3.6 | 3.1 | -0.3 | ||
| Net exports | 3.1 | 5.5 | -2.9 | -7.7 | -3.1 | ||
| Exports of goods and services | 62.9 | 61.9 | 48.0 | 44.1 | 60.7 | ||
| Imports of goods and services | 59.8 | 56.4 | 50.9 | 51.9 | 63.8 | ||
| Statistical discrepancy | 0.0 | 0.0 | -1.9 | -2.0 | -1.1 | ||
Preltminao data.
Includes: hotels and restaurants; real estate, renting and business activities, health and education; public administration and defense.
Bulgaria: National Accounts, 1996-2000
(NCEA. based on NACE, Rev. 1)
| 1996 | 1997 | 1998 1/ | 1999 1/ | 2000 1/ | |||
|---|---|---|---|---|---|---|---|
| Q1-Q3 | |||||||
| (Gross value added at basic prices and GDP) | |||||||
| (In current prices, in millions of leva) | |||||||
| Agriculture and forestry | 253.7 | 4,062.7 | 4,045.4 | 3,440.0 | 2,397.0 | ||
| Fishing | 0.7 | 6.2 | 7.1 | 7.0 | 8.0 | ||
| Industry | 497.9 | 4,316.3 | 5,508.8 | 5,326.0 | 4,510.2 | ||
| Mining and quarrying | 29.2 | 344.7 | 294.0 | 336.0 | 269.8 | ||
| Manufacturing | 345.8 | 2,857.6 | 3,664.3 | 3,303.0 | 2,864.3 | ||
| Electricity, gas and water supply | 52.6 | 689.3 | 832.9 | 950.0 | 783.9 | ||
| Construction | 70.2 | 424.6 | 717.6 | 737.0 | 592.3 | ||
| Services | 898.9 | 6,915.5 | 9,649.1 | 11,125.0 | 8,876.7 | ||
| Trade, repair of motor vehicles, personal | |||||||
| and household appliances | 179.6 | 1,304.9 | 1,470.3 | 1,486.0 | 1,336.4 | ||
| Transport | 92.6 | 814.4 | 1,025.7 | 959.0 | 913.3 | ||
| Communications | 30.6 | 340.6 | 551.6 | 778.0 | 778.8 | ||
| Financial intermediation and insurance | 143.9 | 398.2 | 407.2 | 585.0 | 520.9 | ||
| Other services 2/ | 452.2 | 4,057.3 | 6,194.3 | 7,317.0 | 5,327.4 | ||
| Total of economic activity groupings | 1,650.4 | 15,294.5 | 19,203.2 | 19,891.0 | 15,783.9 | ||
| Adjustments | 98.3 | 1,760.7 | 2,373.8 | 2,885.0 | 2,153.2 | ||
| GDP at market prices | 1,748.7 | 17,055.2 | 21,577.0 | 22,776.0 | 17,937.1 | ||
| Household consumption | 1,340.2 | 11,981.7 | 15,733.7 | 17,037.0 | 13,104.2 | ||
| Government consumption | 207.5 | 2,188.1 | 3,255.3 | 3,612.0 | 2,994.3 | ||
| Gross fixed capital formation | 238.5 | 1,841.0 | 2,850.8 | 3,632.0 | 2,659.0 | ||
| Changes in inventories | -91.6 | 100.8 | 785.6 | 707.0 | -64.0 | ||
| Net exports | 54.1 | 943.6 | 630.4 | -1,765.0 | -553.3 | ||
| Exports of goods and services | 1,100.0 | 10,555.9 | 10,360.9 | 10,054.0 | 10,894.9 | ||
| Imports of goods and services | 1,045.8 | 9,612.2 | 10,991.3 | 11,819.0 | 11,448.2 | ||
| Statistical discrepancy | 0.0 | 0.0 | -418.1 | -447.0 | -230.1 | ||
| (Growth rate in prices of previous year, in percent) | |||||||
| GDP at market prices | -10.1 | -7.0 | 3.5 | 2.4 | 5.3 | ||
| Agriculture and forestry | -7.4 | 32.9 | 1.4 | 0.6 | -15.5 | ||
| Industry | 11.8 | -11.3 | 4.3 | -4.4 | 12.0 | ||
| Services | -9.3 | -19.3 | 0.5 | 5.8 | 10.3 | ||
| Household consumption | -1.9 | -17.2 | 8.2 | 5.2 | 2.8 | ||
| Government consumption | -28.9 | -1.4 | 4.0 | 2.0 | 7.9 | ||
| Gross fixed capital formation | -21.2 | -23.9 | 32.9 | 25.3 | 9.8 | ||
| (Percent change) | |||||||
| Memorandum items: | |||||||
| GDP implicit deflator | 122.9 | 949.1 | 22.2 | 3.1 | 4.7 | ||
| (In percent of GDP) | |||||||
| Agriculture and forestry | 14.5 | 23.8 | 18.8 | 18.1 | 13.4 | ||
| Industry | 28.5 | 25.3 | 25.5 | 23.4 | 25.1 | ||
| Services | 51.4 | 40.5 | 44.7 | 48.8 | 49.5 | ||
| Total of economic activity groupings | 94.4 | 89.7 | 89.0 | 87.3 | 88.0 | ||
| Adjustments | 5.6 | 10.3 | 11.0 | 12.7 | 12.0 | ||
| GDP at market prices | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | ||
| Final consumption | 88.5 | 83.1 | 88.0 | 90.7 | 89.7 | ||
| Individual consumption | 82.8 | 76.9 | 79.8 | 82.3 | 80.1 | ||
| Households expenditures | 76.3 | 69.9 | 72.4 | 74.3 | 72.5 | ||
| NPISHs expenditures | 0.3 | 0.4 | 0.5 | 0.5 | 0.6 | ||
| Government expenditures | 6.2 | 6.6 | 6.9 | 7.5 | 7.1 | ||
| Collective consumption | 5.7 | 6.2 | 8.2 | 8.4 | 9.6 | ||
| Gross fixed capital formation | 13.6 | 10.8 | 13.2 | 15.9 | 14.8 | ||
| Changes in inventories | -5.2 | 0.6 | 3.6 | 3.1 | -0.3 | ||
| Net exports | 3.1 | 5.5 | -2.9 | -7.7 | -3.1 | ||
| Exports of goods and services | 62.9 | 61.9 | 48.0 | 44.1 | 60.7 | ||
| Imports of goods and services | 59.8 | 56.4 | 50.9 | 51.9 | 63.8 | ||
| Statistical discrepancy | 0.0 | 0.0 | -1.9 | -2.0 | -1.1 | ||
Preltminao data.
Includes: hotels and restaurants; real estate, renting and business activities, health and education; public administration and defense.
Bulgaria: Selected Transition Economies: Cumulative Change in GDP, 1989-2000
Compares the GDP in the year of its lowest level since the beginning of the transition with the level of 1989.
Bulgaria: Selected Transition Economies: Cumulative Change in GDP, 1989-2000
| 1989-2000 | Peak Decline Since 1989 1/ | |
|---|---|---|
| Albania | -1 | -40 |
| Bulgaria | -30 | -37 |
| Czech Republic | -5 | -15 |
| Hungary | 5 | -18 |
| Poland | 34 | -14 |
| Romania | -23 | -25 |
| Average (unweighted) | -3 | -25 |
Compares the GDP in the year of its lowest level since the beginning of the transition with the level of 1989.
Bulgaria: Selected Transition Economies: Cumulative Change in GDP, 1989-2000
| 1989-2000 | Peak Decline Since 1989 1/ | |
|---|---|---|
| Albania | -1 | -40 |
| Bulgaria | -30 | -37 |
| Czech Republic | -5 | -15 |
| Hungary | 5 | -18 |
| Poland | 34 | -14 |
| Romania | -23 | -25 |
| Average (unweighted) | -3 | -25 |
Compares the GDP in the year of its lowest level since the beginning of the transition with the level of 1989.
Bulgaria: Industrial Sector, 1991-95 1/
(Old classification) 2/
Includes state and private sectors, using the SNA methodology.
The classification changed in 1996.
Including holding gains/losses.
Self-employed and other small private unincorporated firms engaged in market production; included in other headings from 1997.
Bulgaria: Industrial Sector, 1991-95 1/
(Old classification) 2/
| 19913/ | 19923/ | 19933/ | 19943/ | 1994 | 1995 | |||
|---|---|---|---|---|---|---|---|---|
| (In current prices, in millions of leva) | ||||||||
| Industry value added | ||||||||
| Total | 53.9 | 78.4 | 97.7 | 182.3 | 157.4 | 272.7 | ||
| Manufacturing and mining | 46.1 | 63.0 | 75.5 | 145.5 | 120.9 | 212.5 | ||
| Construction | 6.4 | 11.7 | 16.1 | 25.4 | 25.1 | 41.6 | ||
| Unincorporated activities 4/ | 1.4 | 3.7 | 6.1 | 11.4 | 11.4 | 18.7 | ||
| State | 50.4 | 70.0 | 79.8 | 47.8 | 122.9 | 197.1 | ||
| Manufacturing and mining | 45.0 | 61.2 | 70.3 | 135.5 | 110.9 | 181.9 | ||
| Construction | 5.4 | 8.8 | 9.5 | 12.3 | 12.0 | 15.3 | ||
| Private | 3.5 | 8.4 | 17.9 | 34.5 | 34.5 | 75.6 | ||
| Manufacturing and mining | 1.1 | 1.8 | 5.2 | 10.0 | 10.0 | 30.6 | ||
| Construction | 1.0 | 2.9 | 6.6 | 13.1 | 13.1 | 26.3 | ||
| Unincorporated activities 4/ | 1.4 | 3.7 | 6.1 | 11.4 | 11.4 | 18.7 | ||
| (Growth rate in prices of previous year, in percent) | ||||||||
| Total | … | 6.4 | -6.2 | 6.0 | … | -5.4 | ||
| Manufacturing and mining | … | 10.1 | -6.6 | 6.9 | … | -8.0 | ||
| Construction | … | 12.5 | -7.3 | -0.3 | … | 2.2 | ||
| Unincorporated activities 4/ | … | 27.9 | 3.5 | 10.8 | … | 6.5 | ||
| State | … | -9.2 | -12.7 | 3.7 | … | -16.2 | ||
| Manufacturing and mining | … | -10.4 | -10.6 | 6.7 | … | -15.6 | ||
| Construction | … | 0.7 | -27.1 | -18.5 | … | -21.1 | ||
| Private | … | 33.6 | 47.7 | 16.2 | … | 33.1 | ||
| Manufacturing and mining | … | 0.8 | 133.5 | 10.1 | … | 76.3 | ||
| Construction | … | 79.7 | 52.5 | 26.1 | … | 23.3 | ||
| Unincorporated activities 4/ | … | 27.9 | 3.5 | 10.8 | … | 6.5 | ||
| (Percentage) | ||||||||
| Share of economy (gross value added) | ||||||||
| Total industry | 37.4 | 40.5 | 35.0 | 35.4 | 32.1 | 32.7 | ||
| Of which: | ||||||||
| Manufacturing and mining | 31.9 | 32.6 | 27.0 | 28.3 | 24.7 | 25.5 | ||
| Construction | 45.0 | 6.0 | 5.8 | 4.9 | 5.1 | 5.0 | ||
| Unincorporated activities 4/ | 1.0 | 1.9 | 2.2 | 2.2 | 2.3 | 2.2 | ||
| Share of state sector | ||||||||
| in total industry | 93.5 | 89.3 | 81.7 | 81.1 | 78.1 | 72.3 | ||
| Manufacturing and mining | 97.6 | 97.1 | 93.1 | 93.1 | 91.7 | 85.6 | ||
| Construction | 84.4 | 75.2 | 59.0 | 48.4 | 47.8 | 36.7 | ||
| Share of private sector | ||||||||
| in total industry | 6.5 | 10.7 | 18.3 | 18.9 | 21.9 | 27.7 | ||
| Manufacturing and mining | 2.4 | 2.9 | 6.9 | 6.9 | 8.3 | 14.4 | ||
| Construction | 15.6 | 24.8 | 41.0 | 51.6 | 52.2 | 63.3 | ||
| Unincorporated activities 4/ | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | ||
Includes state and private sectors, using the SNA methodology.
The classification changed in 1996.
Including holding gains/losses.
Self-employed and other small private unincorporated firms engaged in market production; included in other headings from 1997.
Bulgaria: Industrial Sector, 1991-95 1/
(Old classification) 2/
| 19913/ | 19923/ | 19933/ | 19943/ | 1994 | 1995 | |||
|---|---|---|---|---|---|---|---|---|
| (In current prices, in millions of leva) | ||||||||
| Industry value added | ||||||||
| Total | 53.9 | 78.4 | 97.7 | 182.3 | 157.4 | 272.7 | ||
| Manufacturing and mining | 46.1 | 63.0 | 75.5 | 145.5 | 120.9 | 212.5 | ||
| Construction | 6.4 | 11.7 | 16.1 | 25.4 | 25.1 | 41.6 | ||
| Unincorporated activities 4/ | 1.4 | 3.7 | 6.1 | 11.4 | 11.4 | 18.7 | ||
| State | 50.4 | 70.0 | 79.8 | 47.8 | 122.9 | 197.1 | ||
| Manufacturing and mining | 45.0 | 61.2 | 70.3 | 135.5 | 110.9 | 181.9 | ||
| Construction | 5.4 | 8.8 | 9.5 | 12.3 | 12.0 | 15.3 | ||
| Private | 3.5 | 8.4 | 17.9 | 34.5 | 34.5 | 75.6 | ||
| Manufacturing and mining | 1.1 | 1.8 | 5.2 | 10.0 | 10.0 | 30.6 | ||
| Construction | 1.0 | 2.9 | 6.6 | 13.1 | 13.1 | 26.3 | ||
| Unincorporated activities 4/ | 1.4 | 3.7 | 6.1 | 11.4 | 11.4 | 18.7 | ||
| (Growth rate in prices of previous year, in percent) | ||||||||
| Total | … | 6.4 | -6.2 | 6.0 | … | -5.4 | ||
| Manufacturing and mining | … | 10.1 | -6.6 | 6.9 | … | -8.0 | ||
| Construction | … | 12.5 | -7.3 | -0.3 | … | 2.2 | ||
| Unincorporated activities 4/ | … | 27.9 | 3.5 | 10.8 | … | 6.5 | ||
| State | … | -9.2 | -12.7 | 3.7 | … | -16.2 | ||
| Manufacturing and mining | … | -10.4 | -10.6 | 6.7 | … | -15.6 | ||
| Construction | … | 0.7 | -27.1 | -18.5 | … | -21.1 | ||
| Private | … | 33.6 | 47.7 | 16.2 | … | 33.1 | ||
| Manufacturing and mining | … | 0.8 | 133.5 | 10.1 | … | 76.3 | ||
| Construction | … | 79.7 | 52.5 | 26.1 | … | 23.3 | ||
| Unincorporated activities 4/ | … | 27.9 | 3.5 | 10.8 | … | 6.5 | ||
| (Percentage) | ||||||||
| Share of economy (gross value added) | ||||||||
| Total industry | 37.4 | 40.5 | 35.0 | 35.4 | 32.1 | 32.7 | ||
| Of which: | ||||||||
| Manufacturing and mining | 31.9 | 32.6 | 27.0 | 28.3 | 24.7 | 25.5 | ||
| Construction | 45.0 | 6.0 | 5.8 | 4.9 | 5.1 | 5.0 | ||
| Unincorporated activities 4/ | 1.0 | 1.9 | 2.2 | 2.2 | 2.3 | 2.2 | ||
| Share of state sector | ||||||||
| in total industry | 93.5 | 89.3 | 81.7 | 81.1 | 78.1 | 72.3 | ||
| Manufacturing and mining | 97.6 | 97.1 | 93.1 | 93.1 | 91.7 | 85.6 | ||
| Construction | 84.4 | 75.2 | 59.0 | 48.4 | 47.8 | 36.7 | ||
| Share of private sector | ||||||||
| in total industry | 6.5 | 10.7 | 18.3 | 18.9 | 21.9 | 27.7 | ||
| Manufacturing and mining | 2.4 | 2.9 | 6.9 | 6.9 | 8.3 | 14.4 | ||
| Construction | 15.6 | 24.8 | 41.0 | 51.6 | 52.2 | 63.3 | ||
| Unincorporated activities 4/ | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | ||
Includes state and private sectors, using the SNA methodology.
The classification changed in 1996.
Including holding gains/losses.
Self-employed and other small private unincorporated firms engaged in market production; included in other headings from 1997.
Bulgaria: Industrial Sector, 1996-2000
(NCEA, based on NACE, Rev. 1)
Preliminary data.
For 1996, according to the former classification in use - CBNE ’86.
Bulgaria: Industrial Sector, 1996-2000
(NCEA, based on NACE, Rev. 1)
| 1996 | 1997 | 19981/ | 19991/ | 20001/ | ||
|---|---|---|---|---|---|---|
| Q1-Q3 | ||||||
| (In current prices, in millions of leva) | ||||||
| Industry value added | ||||||
| Total | 497.9 | 4,316.3 | 5,508.8 | 5,326.0 | 4,510.2 | |
| Mining and quarrying | 29.2 | 344.7 | 294.0 | 336.0 | 269.8 | |
| Manufacturing | 345.8 | 2,857.6 | 3,664.3 | 3,303.0 | 2,864.3 | |
| Electricity, gas and water supply | 52.6 | 689.3 | 832.9 | 950.0 | 783.9 | |
| Construction | 70.2 | 424.6 | 717.6 | 737.0 | 592.3 | |
| Public | 374.0 | 2,832.7 | 3,075.9 | 2,487.0 | 1,441.2 | |
| Mining and quarrying | 28.2 | 330.3 | 274.2 | 304.0 | 175.6 | |
| Manufacturing | 270.7 | 1,688.4 | 1,773.5 | 1,031.0 | 384.8 | |
| Electricity, gas and water supply | 52.6 | 688.2 | 831.6 | 949.0 | 779.9 | |
| Construction | 22.6 | 125.8 | 196.7 | 203.0 | 100.9 | |
| Private | 123.8 | 1,483.6 | 2,432.8 | 2,839.0 | 3,069.0 | |
| Mining and quarrying | 1.0 | 14.4 | 19.8 | 32.0 | 94.2 | |
| Manufacturing | 75.1 | 1,169.2 | 1,890.7 | 2,272.0 | 2,479.5 | |
| Electricity, gas and water supply | 0.0 | 1.1 | 1.3 | 1.0 | 3.9 | |
| Construction | 47.7 | 298.9 | 520.9 | 534.0 | 491.4 | |
| (Growth rate in prices of previous year, in percent) 2/ | ||||||
| Total | -12.9 | -11.3 | 4.3 | -4.4 | 12.0 | |
| Mining and quarrying | … | -7.3 | 3.0 | -1.3 | -0.5 | |
| Manufacturing | … | -14.9 | 6.5 | -5.9 | 14.0 | |
| Electricity, gas and water supply | … | 23.7 | -5.2 | 0.5 | 14.6 | |
| Construction | -20.8 | -21.4 | 5.8 | -3.6 | 7.1 | |
| Public | -15.9 | -24.8 | -5.9 | -20.2 | -26.1 | |
| Mining and quarrying | … | -7.9 | 0.1 | -4.0 | -31.8 | |
| Manufacturing | … | -35.9 | -8.0 | -34.3 | -52.6 | |
| Electricity, gas and water supply | … | 23.6 | -5.2 | 0.5 | 14.0 | |
| Construction | -30.7 | -24.6 | 2.5 | -2.6 | -38.7 | |
| Private | 4.8 | 29.4 | 23.8 | 15.6 | 47.1 | |
| Mining and quarrying | … | 10.9 | 70.4 | 35.3 | 236.9 | |
| Manufacturing | … | 60.9 | 27.6 | 20.8 | 49.0 | |
| Electricity, gas and water supply | … | 197.3 | -15.1 | -10.7 | 433.6 | |
| Construction | -15.1 | -19.9 | 7.2 | -3.9 | 26.2 | |
| (Percentage) | ||||||
| Share of economy (gross value added) | ||||||
| Total industry | 30.2 | 28.2 | 28.7 | 26.8 | 28.6 | |
| Of which: | ||||||
| Mining and quarrying | 1.8 | 2.2 | 1.5 | 1.7 | 1.7 | |
| Manufacturing | 20.9 | 18.7 | 19.1 | 16.6 | 18.1 | |
| Electricity, gas and water supply | 3.2 | 4.5 | 4.4 | 4.8 | 5 | |
| Construction | 4.3 | 2.8 | 3.7 | 3.7 | 3.8 | |
| Share of public sector | ||||||
| in total industry | 75.1 | 65.6 | 55.8 | 46.7 | 32.0 | |
| Mining and quarrying | 96.7 | 95.8 | 93.3 | 90.5 | 65.1 | |
| Manufacturing | 78.3 | 59.1 | 48.4 | 31.2 | 13.4 | |
| Electricity, gas and water supply | 99.9 | 99.8 | 99.8 | 99.9 | 99.5 | |
| Construction | 32.1 | 29.6 | 27.4 | 27.5 | 17.0 | |
| Share of private sector | ||||||
| in total industry | 24.9 | 34.4 | 44.2 | 53.3 | 68.0 | |
| Mining and quarrying | 3.3 | 4.2 | 6.7 | 9.5 | 34.9 | |
| Manufacturing | 21.7 | 40.9 | 51.6 | 68.8 | 86.6 | |
| Electricity, gas and water supply | 0.1 | 0.2 | 0.2 | 0.1 | 0.5 | |
| Construction | 67.9 | 70.4 | 72.6 | 72.5 | 83.0 | |
Preliminary data.
For 1996, according to the former classification in use - CBNE ’86.
Bulgaria: Industrial Sector, 1996-2000
(NCEA, based on NACE, Rev. 1)
| 1996 | 1997 | 19981/ | 19991/ | 20001/ | ||
|---|---|---|---|---|---|---|
| Q1-Q3 | ||||||
| (In current prices, in millions of leva) | ||||||
| Industry value added | ||||||
| Total | 497.9 | 4,316.3 | 5,508.8 | 5,326.0 | 4,510.2 | |
| Mining and quarrying | 29.2 | 344.7 | 294.0 | 336.0 | 269.8 | |
| Manufacturing | 345.8 | 2,857.6 | 3,664.3 | 3,303.0 | 2,864.3 | |
| Electricity, gas and water supply | 52.6 | 689.3 | 832.9 | 950.0 | 783.9 | |
| Construction | 70.2 | 424.6 | 717.6 | 737.0 | 592.3 | |
| Public | 374.0 | 2,832.7 | 3,075.9 | 2,487.0 | 1,441.2 | |
| Mining and quarrying | 28.2 | 330.3 | 274.2 | 304.0 | 175.6 | |
| Manufacturing | 270.7 | 1,688.4 | 1,773.5 | 1,031.0 | 384.8 | |
| Electricity, gas and water supply | 52.6 | 688.2 | 831.6 | 949.0 | 779.9 | |
| Construction | 22.6 | 125.8 | 196.7 | 203.0 | 100.9 | |
| Private | 123.8 | 1,483.6 | 2,432.8 | 2,839.0 | 3,069.0 | |
| Mining and quarrying | 1.0 | 14.4 | 19.8 | 32.0 | 94.2 | |
| Manufacturing | 75.1 | 1,169.2 | 1,890.7 | 2,272.0 | 2,479.5 | |
| Electricity, gas and water supply | 0.0 | 1.1 | 1.3 | 1.0 | 3.9 | |
| Construction | 47.7 | 298.9 | 520.9 | 534.0 | 491.4 | |
| (Growth rate in prices of previous year, in percent) 2/ | ||||||
| Total | -12.9 | -11.3 | 4.3 | -4.4 | 12.0 | |
| Mining and quarrying | … | -7.3 | 3.0 | -1.3 | -0.5 | |
| Manufacturing | … | -14.9 | 6.5 | -5.9 | 14.0 | |
| Electricity, gas and water supply | … | 23.7 | -5.2 | 0.5 | 14.6 | |
| Construction | -20.8 | -21.4 | 5.8 | -3.6 | 7.1 | |
| Public | -15.9 | -24.8 | -5.9 | -20.2 | -26.1 | |
| Mining and quarrying | … | -7.9 | 0.1 | -4.0 | -31.8 | |
| Manufacturing | … | -35.9 | -8.0 | -34.3 | -52.6 | |
| Electricity, gas and water supply | … | 23.6 | -5.2 | 0.5 | 14.0 | |
| Construction | -30.7 | -24.6 | 2.5 | -2.6 | -38.7 | |
| Private | 4.8 | 29.4 | 23.8 | 15.6 | 47.1 | |
| Mining and quarrying | … | 10.9 | 70.4 | 35.3 | 236.9 | |
| Manufacturing | … | 60.9 | 27.6 | 20.8 | 49.0 | |
| Electricity, gas and water supply | … | 197.3 | -15.1 | -10.7 | 433.6 | |
| Construction | -15.1 | -19.9 | 7.2 | -3.9 | 26.2 | |
| (Percentage) | ||||||
| Share of economy (gross value added) | ||||||
| Total industry | 30.2 | 28.2 | 28.7 | 26.8 | 28.6 | |
| Of which: | ||||||
| Mining and quarrying | 1.8 | 2.2 | 1.5 | 1.7 | 1.7 | |
| Manufacturing | 20.9 | 18.7 | 19.1 | 16.6 | 18.1 | |
| Electricity, gas and water supply | 3.2 | 4.5 | 4.4 | 4.8 | 5 | |
| Construction | 4.3 | 2.8 | 3.7 | 3.7 | 3.8 | |
| Share of public sector | ||||||
| in total industry | 75.1 | 65.6 | 55.8 | 46.7 | 32.0 | |
| Mining and quarrying | 96.7 | 95.8 | 93.3 | 90.5 | 65.1 | |
| Manufacturing | 78.3 | 59.1 | 48.4 | 31.2 | 13.4 | |
| Electricity, gas and water supply | 99.9 | 99.8 | 99.8 | 99.9 | 99.5 | |
| Construction | 32.1 | 29.6 | 27.4 | 27.5 | 17.0 | |
| Share of private sector | ||||||
| in total industry | 24.9 | 34.4 | 44.2 | 53.3 | 68.0 | |
| Mining and quarrying | 3.3 | 4.2 | 6.7 | 9.5 | 34.9 | |
| Manufacturing | 21.7 | 40.9 | 51.6 | 68.8 | 86.6 | |
| Electricity, gas and water supply | 0.1 | 0.2 | 0.2 | 0.1 | 0.5 | |
| Construction | 67.9 | 70.4 | 72.6 | 72.5 | 83.0 | |
Preliminary data.
For 1996, according to the former classification in use - CBNE ’86.
Bulgaria: Services Sector: Total, State, and Private, 1991-2000
Including holding gains/losses.
Preliminary data.
From 1996 on, including repairs of motor vehicles and personal and household appliances
Includes: housing and municipal services; business services; science; education, culture and art; health and social security, sports recreation and tourism; finance, credit and insurance; government; and NPISNs.
Bulgaria: Services Sector: Total, State, and Private, 1991-2000
| 19911/ | 19921/ | 19931/ | 1994 | 1995 | 1996 | 1997 | 19982/ | 19992/ | 20002/ | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1-Q3 | |||||||||||
| (In current prices, in millions of leva) | |||||||||||
| Value added in services | |||||||||||
| Total | 70 | 92 | 152 | 272 | 450 | 899 | 6,915 | 9,649 | 11125.0 | 8876.7 | |
| Trade 3/ | 22 | 18 | 27 | 53 | 102 | 180 | 1,305 | 1,470 | 1486.0 | 1336.4 | |
| Transport | 7 | 10 | 14 | 25 | 38 | 93 | 814 | 1,026 | 959.0 | 913.3 | |
| Communications | 2 | 2 | 5 | 9 | 12 | 31 | 341 | 552 | 778.0 | 778.8 | |
| Other 4/ | 49 | 62 | 106 | 185 | 299 | 596 | 4,456 | 6,602 | 7902.0 | 5848.3 | |
| State | 55 | 62 | 85 | 150 | 193 | 347 | 2,723 | 3,814 | 4327.0 | 3422.9 | |
| Trade 3/ | 10 | 11 | 12 | 20 | 26 | 37 | 286 | 316 | 193.0 | 133.9 | |
| Transport | 7 | 9 | 11 | 19 | 23 | 56 | 481 | 533 | 428.0 | 331.2 | |
| Communications | 2 | 2 | 5 | 9 | 12 | 28 | 310 | 431 | 567.0 | 472.0 | |
| Other 4/ | 37 | 41 | 58 | 102 | 132 | 225 | 1,646 | 2,534 | 3139.0 | 2485.7 | |
| Private | 14 | 30 | 66 | 123 | 257 | 552 | 4,192 | 5,836 | 6798.0 | 5453.9 | |
| Trade 3/ | 2 | 8 | 14 | 33 | 76 | 142 | 1,019 | 1,154 | 1293.0 | 1202.5 | |
| Transport | 0 | 2 | 3 | 7 | 15 | 37 | 333 | 493 | 531.0 | 582.1 | |
| Communications | 0 | 0 | 0 | 0 | 0 | 2 | 30 | 121 | 211.0 | 306.8 | |
| Other 4/ | 12 | 21 | 49 | 83 | 166 | 371 | 2,810 | 4,068 | 4763.0 | 3362.6 | |
| (Growth rate in prices of previous year, in percent) | |||||||||||
| Total | … | -26.9 | 0.6 | -3.1 | 4.0 | -9.3 | -19.3 | 0.5 | 5.8 | 10.3 | |
| Trade 3/ | … | -19.2 | 0.4 | 7.6 | 2.1 | -21.5 | -33.4 | 6.9 | 1.9 | 18.5 | |
| Transport | … | 3.9 | 8.5 | 3.1 | 39.8 | 0.0 | 0.5 | 9.8 | -3.2 | 12.3 | |
| Communications | … | 2.9 | 8.0 | 0.9 | 32.5 | 8.1 | 5.5 | 12.6 | 20.7 | 41.2 | |
| Other 4/ | … | -34.4 | -0.9 | -6.7 | -1.7 | -7.0 | -19.5 | 0.4 | 6.8 | 3.3 | |
| State | … | -37.9 | -9.8 | -8.3 | -10.5 | -3.3 | -20.7 | -4.9 | 4.8 | 5.6 | |
| Trade 3/ | … | -44.3 | -22.0 | -9.6 | -25.5 | -21.7 | -30.1 | -0.4 | -38.4 | -7.6 | |
| Transport | … | -2.8 | -2.2 | -2.3 | 21.6 | 9.4 | 2.4 | -21.9 | -17.7 | -0.8 | |
| Communications | … | 2.9 | 7.2 | 0.7 | 29.3 | 3.5 | 2.4 | -8.0 | 12.2 | 11.6 | |
| Other 4/ | … | -44.7 | -9.2 | -9.8 | -16.7 | -1.2 | -27.7 | -0.2 | 13.6 | 8.5 | |
| Private | … | 15.4 | 22.4 | 3.7 | 24.3 | -5.9 | -18.5 | 4.0 | 6.5 | 13.4 | |
| Trade 3/ | … | 87.0 | 32.0 | 22.1 | 19.2 | -21.4 | -34.2 | 8.9 | 12.9 | 22.6 | |
| Transport | … | 139.8 | 69.7 | 19.3 | 91.6 | -14.1 | -2.4 | 7.8 | 12.5 | 24.8 | |
| Communications | … | … | 1,700.0 | 13.6 | 357.6 | 149.9 | 44.5 | 222.6 | 50.8 | 134.9 | |
| Other 4/ | … | -1.0 | 15.4 | -3.0 | 20.6 | -21.4 | -14.5 | -0.6 | 2.6 | 0.2 | |
| Gross value added | … | -17.5 | -5.9 | 1.4 | 2.3 | -9.8 | -8.9 | 1.8 | 1.8 | 6.0 | |