High priority

• Take the remaining steps to support SDDS subscription, including the development and dissemination of a National Summary Data Page for SDDS data categories and posting ARCs on the website of the disseminating agencies. Compile and disseminate the Data Template on International Reserves and Foreign Currency Liquidity when available. Also, disseminate production index data in reference to a fixed base.

The NSI, MoF, and BNB secured the country subscription to SDDS on December 1, 2003. In September a program for the remaining steps to be taken for SDDS subscription was developed by the three institutions and was followed by each of them.

The MoF develops the GFS and government debt national summary data page (NSDP) for SDDS as well as the advance release calendar (ARC). The data are posted on the website of the BNB and are published on the website of the MoF.

NSI finished the work aiming for full compliance with SDDS subscription requirements. Since the beginning of 2003, monthly-disseminated PPI has been included in the advance release calendar, published on the NSI website. Industrial Production Index time series referenced to 2000 are being disseminated by the NSI as of January 2003. Beginning in 2004, the fourth quarter GDP data will be disseminated within 80 days after the reference period, and the timelines of the external trade data dissemination will be reduced from eight to six weeks. The activities to advance the timeliness of data dissemination on PPI according to SDDS requirements were completed. Metadata for base pages, dissemination formats pages, and summary methodology pages for the IMF’s DSBB website were prepared. The Bulgaria’s NSDP and ARC (for SDDS data categories) for December 2003 and for the first four months of 2004, in line with the SDDS requirements, were posted on:http://www.bnb.bg/bnb/home.nsf/vWebPagesByADOptionEN/7FB1128193568AF2C2256DC800395580?OpenDocument&count=-1&EN and the national metadata were posted on the IMF’s DSBB website http://dsbb.imf.org/Applications/web/sddscountrycategorylist?strcode=BGR.

More detailed information on data categories is available on the NSI website http://www.nsi.bg in Bulgarian and English languages.

BNB was chosen to coordinate the preparatory work for the country subscription to SDDS. In this relation it developed the electronic pages of the NSDP and the Template on International Reserves and Foreign Currency Liquidity on its website. The bank also did all necessary work in the monetary and external sectors for the NSDP as well as the elaboration of the present advance release calendar to make it in full compliance with SDDS requirements. For the needs of the Template on International Reserves and Foreign Currency Liquidity, the BNB compiled the data on foreign reserves at the bank and the necessary data on the government foreign debt service schedule from the MoF. BNB finished the country NSDP and Template on International Reserves and Foreign Currency Liquidity by December 1, 2003. By that time the external debt in SDDS format was also completed.

• Provide the NSI with appropriate office accommodation; pursue the application to reclassify the NSI to a higher status (to a category 2 institution) to make staff salaries more competitive; allocate additional staff within the headquarters of the NSI for the compilation and development of the national accounts, CPI and PPI; and appropriately increase the staff in the BOP division of the BNB.

The Decision of the Council of Ministers (CM) No. 450 as of 2002, which obliged the NSI to vacate the building at No. 10 on 6^th September Street, could not be fulfilled due to reasons explained in seven reports addressed to the Vice Premier and Minister of Labour and Social Policy and several letters to the Minister of Regional Development and Public Works in his capacity as a Chairman of the Commission for Distribution and Usage of Administrative Buildings—state property. The working group, created by the Minister of the Regional Development and Public Works, held a great number of conversations with the Vice Premier and Minister of Labour and Social Policy, Minister of Regional Development and Public Works, Secretary General of the Ministry of Finance, Secretary General of the Council of Ministers, Chairman of the Parliamentary Commission on Budget and Finances, Regional governors in Sofia-capital district and Sofia district, etc. but did not settle the question completely. As a result, a state building of usable area of 2,100 square meters has been taken away from the NSI, and in return it received premises of 460 square meters for rent in two different buildings, property of a joint-stock company. The negotiations with the Tax Administration related to the joint usage of the building at No. 10, 6^th September Street were finalized. In addition, the possibility of erecting additional stories on the existing NSI building at No. 2, P. Volov Street is under study. There are finances for it, and the problems are purely architectural, technical and engineering in nature.

NSI went on undertaking steps before the Council of Ministers to reclassify the category of administration (from 3 to a category 2 institution), according to IMF and Eurostat recommendations, which might lead to higher salaries of the staff too. The action plan for the strategy of accelerating the EU accession negotiations of Bulgaria has been adopted based on the CM Decision No. 149, as of March 12, 2003, in which under point 71 a change of the NSI status from A3 to A2 is envisaged. A CM Decree No 279/25.11.03 on amendment of the category of NSI administration from A3 to A2 was adopted on November 13, 2003 and will enter into force on January 1, 2004.

Other key recommendations

• Amend the GDDS metadata to accurately reflect the internal government pre-release access arrangements for key data (e.g., national accounts and CPI).

In accordance with the newly approved “Rules for Dissemination of Statistical Information Products and Services,” the ministers, concerned with the relevant main economic and social indicators, receive data one hour before the press conferences for briefing purposes, but under strict embargo. That change has been reflected in GDDS Table C (Data Integrity and Access by the Public), and the updated table has been included in the IMF’s DSBB website. In addition, the message has been published (in Bulgarian and in English) on the NSI website. The aim of this message is to inform all users about the public access to statistical data, produced and disseminated by the NSI.

• Clearly indicate preliminary and revised data to all users. Undertake more systematic revision practices and studies, and make the results available to users.

Concerning GFS, following the IMF mission’s recommendations in January, the 2002 preliminary data for the consolidated fiscal budget (national methodology) and consolidated central government (GFSM 1986 concept) have been indicated on the website.

Although the preliminary data and policy on NA revisions have been indicated in general in the main and specialized statistical publications with NA data, NSI undertakes steps to further clarify and acquaint the statistical data users with the adopted policy on revisions, done by means of press releases, announcements on the NSI website, and information in the methodological notes of the statistical publications.

Preliminary CPI data for January each year are clearly indicated in the publications and explained to the users. Regarding the major CPI revision for the period 1995–2000, a detailed analysis has been made and the results have been presented to the Methodological Council and approved by it. Users have been notified about the change made.

High priority

• Advance the timeliness of the fourth quarter GDP estimates to 90 days.

NSI is undertaking measures to reduce the deadline for elaboration of fourth quarter GDP estimates. The fourth quarter of 2003 data in nominal and real terms will be compiled experimentally within 80 days on the basis of available monthly business indicators on industrial production indices, industrial sales indices, receipts from sales indices of domestic trade; CPI. In addition to the volume indices, quantitative information for transport and communication activities and also labor-input data, household budget survey, foreign trade data, etc. will be used. After that, this method of calculation of the fourth quarter GDP will be introduced in the regular statistical practice and will be included in the calendar of statistical surveys.

• Bring the scope of the national accounts fully into line with the recommendations of the European System of Accounts, 1995 (ESA 95) and continue to develop financial accounts.

NSI participates in all Eurostat activities organized for the candidate countries. The pilot project’s work is designed to achieve overall compliance with ESA 95 requirements and will contribute to the improvement of estimates and exhaustiveness of national accounts.

As a result of the cooperation with the statistical office of Norway in 2003, NSI will implement the software SNA-NT for organization of data flows in the frame of SUT, balancing the tables and valuation of SUT at constant prices of previous year.

The elaboration of financial accounts is a priority field for the development of statistics and its harmonization with the European Legislation. According to the agreement signed with the BNB and the MOF as regards their elaboration, analytical tables and experimental accounts have been prepared up to now. The work will continue within the framework of the National PHARE 2000 program subcomponent “Financial accounts.” A special unit for fulfillment of this task is to be established within the National Economic Accounts and Balances Department.

Other key recommendations

• Publish the ESA 95 metadata produced for Eurostat.

The first version of GDP and GNI metadata according to ESA 95 has been prepared for the reporting year 1998. It could not be considered as final because the level of details and coverage is not sufficient. Elaboration of a full inventory on sources and methods for estimating GNI is foreseen under the Phare 2002 Multibeneficiary Program. It will bring our metadata up to the level and size of the inventories produced by the EU member states. The project is expected to start in 2004. NSI intends to publish this new and more comprehensive version in English and Bulgarian on the NSI website. Meanwhile the reports from NSI participation in all NA pilot projects will be available in the NSI library.

High priority

• Extend the application of quality adjustment techniques to a wider range of product prices.

The application of quality adjustment techniques is extending gradually to a wider range of products.

• Investigate possible ways to maintain more up-to-date retail industry information on the business register to support CPI outlet sampling.

The recommendation to maintain more up-to-date retail industry information to support CPI outlet sampling cannot be implemented in a short-term period. Since 2003 the register has begun to include information at a local-unit level, which is higher than the outlet level, and thus at present it cannot be used for the needs of CPI.

Other key recommendations

• Undertake extensive consultation with major users on including housing in the national CPI.

The concept of Household Final Monetary Consumer Expenditures, according to the Council Regulation (EC) No 1687/98, is used in the definition of CPI weights. Following this concept, both imputed rents and dwelling purchases are not covered in the CPI. Nevertheless, major users of the CPI will be contacted to receive their opinion on whether there is desirability and feasibility to include housing (dwelling purchases) in the national CPI. Our opinion is that at present the market of new dwellings in the country is not yet well developed; the new dwellings are too expensive, and it is difficult for the ordinary consumer to afford such a purchase.

High priority

• Advance the timeliness of the PPI to one month.

NSI has launched a program for progressively shortening the delay (from 40 to 30 days after the end of the reference month) in calculation and presentation of the PPIs on the domestic market.

• Re-commence publication of the PPI and update the ARC and the catalog of publications.

NSI has started to publish PPIs on the domestic market and the first publication was for January 2003 data. PPIs are presented at the regular monthly press conferences, and they are presented in three modes: indices at 2000 as a base year; indices compared with the previous month with that month as a base; and indices compared with the same month of the previous year with that month as a base. At the first press conference, when January data were announced, the methodology for PPI compilation was presented also, and it was posted on the NSI website. Except for the monthly PPIs for 2003, on the NSI website were posted also the historical data series (by sections and by two-digit NACE code) monthly from January 2000 to December 2002.

NSI has started publishing PPIs in the monthly edition “Statistical Journal” (since volume 3, March 2003).

PPIs are included in the ARC and the NSI catalog of publications.

• Complete the program of implementation of transaction pricing methodology into the PPI as soon as possible.

Over the last three years, there has been a program of progressively upgrading the PPIs on the domestic market, applying a methodology that is in accordance with the international standards. Currently, a new survey covers economic activity groups that represent about 90 percent of the sales of industrial enterprises on the domestic market. Implementation of the new methodology for PPI with the introduction of the final panels of enterprises in the new survey with retrospective revisions when necessary is to be finalized by June 2004.

• Finalize the index rebasing program to convert to a year 2000 weighting and reference base period.

The program for rebasing PPIs on the domestic market was finalized in March 2003. Since January 2003, PPIs have been calculated using 2000 as a base year, while for rebasing, an internationally accepted technique is applied. All historical data back to 1995 have been recalculated. One month prior to implementation of the new base year (2000), Eurostat, IMF, as well as national users have been informed about the forthcoming change.

Other key recommendations

• Increase the rigor and the extent to which quality adjustment techniques are applied to product prices.

During the mission of IMF experts on price statistics in February 2003, great attention was paid to the importance of surveying products with constant quality in the two time periods that are compared. The different techniques for quality correction in the case of quality change have also been discussed in detail. The suggested techniques for quality correction were applied in practice, and the accuracy of the calculated PPIs was approved.

High priority

• Improve the fiscal data so they meet fiscal reporting requirements for EU accession. In particular, implement the new chart of accounts (with codes that link the chart to EU and GFSM 2001 frameworks), the Financial Information Management System, and detailed metadata.

In recent years, Bulgaria has been interpreting and applying EU requirements to GFS, following Eurostat recommendations. Since 2002 the ESA 95 and GFSM 2001 concept of deficit calculation is being interpreted and applied as a national methodology. To ensure consistency of the 2002 fiscal data with the data for the previous years, the Bulgarian authorities revised the national statistical data and reclassified the financial transactions included in the expenditure side of the national consolidated fiscal budget for the previous years as financial items. This is described in the national methodological notes on the website.

The official fiscal data are compiled on a cash basis in accordance with the Organic Budget Law, but the new chart of accounts for budget enterprises harmonized with the ESA 95 and GFSM 2001 requirements has provided information for 2001 and 2002 on an accrual basis. This information for general government (except central budget operations) has been internally consolidated and now is being analyzed.

The MoF considers the possibility to change the budget framework for 2005 and to develop it on the basis of the classification of the Statement on Sources and Uses of Cash for the General Government sector, as indicated in the GFSM 2001. Using the above-mentioned breakdown of total assets and liabilities into their constituents and indicating the sources of changes in them from one period to another in terms of cash flows will provide a strong statistical explanation of the factors causing the change in the fiscal deficit of the government. Consumption of fixed assets, imputed transactions, barter and other transactions in kind as well as the transactions to be settled in cash in the future will not be reflected.

The MoF plans to develop the procedure for central budget operations’ recording on a modified accrual basis—tax assessments, interest and some assets and liabilities of the central budget (assets and liabilities resulting from privatization). For this reason, the MoF has created working groups that include experts from the Tax Administration and Customs Agency, as well as the Agency for Privatization, the National Social Security Institute and the Ministry of Economy.

• Disseminate information (stocks and flows) on arrears of central and local governments.

The local and central government units have been instructed to compile accounting data on arrears. Methodological guidelines for reporting of arrears (defined as receivables and liabilities not settled in the preagreed or legally predetermined term) have been provided. The data have been posted to special post-balance-sheet accounts for statistics of arrears and have been analyzed. MoF is going to disseminate this data on its website in the nearest future. This type of data will be received and processed on a quarterly basis.

The MoF also collects monthly information on arrears made mainly by state hospitals and municipalities and plans to disseminate the arrears of the state hospitals and municipalities under activities determined to be state responsibility on the website in the future.

• Collect separate (discrete) monthly data from reporting units (rather than cumulative reports). Compile and disseminate discrete monthly and quarterly data, to create useful time series.

The MoF collection of separate (discrete) monthly data on GFS is envisaged to be introduced after the completion of the Financial Management Information System (FMIS). The system will provide information on a cash and accrual basis for all the central government units and will identify any data revisions. The MoF will be able to extract updated monthly information from the FMIS and to revise monthly (discrete) fiscal data, if necessary.

• The MoF website should be updated monthly.

The MoF has published the December 2002 monthly fiscal data at the end of January 2003 and updates the monthly information for general government (national methodology) and central government (GFSM 1986 concept) within a month after the reference period.

Other key recommendations

• Publish data on local government debt statistics. Reclassify IMF purchases in the government debt statistics. Value domestic and external debt consistently.

The Government Debt Directorate (GDD) has started the local government debt data collection procedure since January 2003. The data as of December 31, 2002 have been already compiled. The MoF receives and summarizes this information according to the individual reports from each local government. According to the assumed obligations to the Eurostat, the GDD started to present the local government debt data in the March 2003 “Government Debt Management.” Bulletin.

The GDD will consider the possibility of reclassifying IMF purchases in the government debt statistics. This new arrangement will cause considerable changes in the government debt data presentation since 1991, because in the MoF’s monthly bulletin “Government Debt Management” and annual reviews, the central government debt is separated into domestic and foreign debt. As a result, the data will be inconsistent with previous publications. However, the GDD will try to meet the IMF recommendations, adding methodological explanations.

Up until December 31, 2002, the domestic debt in the monthly bulletin has been recorded at face value less discounts plus premia, while the foreign debt is valued at full face value, regardless of discounts or premia. In order to bring consistency between these two items, GDD from January 1, 2003 is going to report foreign debt data in the same way as domestic debt—on a cash-received basis.

• Disseminate more fiscal information on the financing of government operations, specifically aggregates on bank and nonbank domestic financing and breakdowns of external financing into bonds and loans.

Beginning in 2003 the MoF is disseminating monthly data on bank and nonbank domestic financing and breakdowns of external financing into bonds and loans for consolidated fiscal budget (general government).

High priority

• Bring reporting instructions into line with the BPM5 guidelines to comply with critical definitions, such as residency and to allow for proper coverage of data, such as an adequate reporting of financial assets. Clarify instructions on the accrual principle and prescribe more systematical valuation at market prices, for example in compiling foreign direct investment and reporting financial assets.

Improved definitions of residency and foreign direct investment were provided by the BNB in the changes to the Foreign Exchange Law made by the National Assembly in July 2003. The changes in the Foreign Exchange Law also provide the necessary legal background for improved reporting (including financial assets) for BOP statistics.

• Improve the comprehensiveness and timeliness of all source data; merchandise trade, International Transaction Reporting System (ITRS) and surveys.

In agreement with the Custom Office its merchandise trade data are regularly used in the BOP compilation since March 2003. This data source meets SDDS requirements for timeliness, accuracy, and reliability. Work on the improvement of the ITRS and further use of direct reporting through surveys has started in line with the amendments to the Foreign Exchange Law and the increased staff in the BOP division.

Other key recommendations

• Foster interagency cooperation to improve the timeliness of the supply of merchandise trade data.

The timeliness of the supply of merchandise trade data to the BNB has been substantially improved by introducing a direct data flow from the Custom Office based on bilateral agreement. The BNB also continues its close cooperation on the compilation of merchandise trade data with the NSI.

• Following the outcome on the proposed revision to the Foreign Exchange Law, the BNB should draw up statistical reporting procedures to address deficiencies in source data.

The BNB has started work to elaborate the BOP reporting procedures in line with the changes made in the Foreign Exchange Law. A new regulation on BOP statistics was approved by the BNB Management Board, which further develops the legal framework to address the deficiencies in source data, especially in recording the foreign assets of the non-banking sector. The use of the new reporting forms will be from the beginning of 2004 and is expected to facilitate substantially the compilation of the BOP and raise its quality.