Transcript Rules of Origin under EPAs Niel Joubert tralac researcher

MINISTRY OF FINANCE
BULGARIA –
ECONOMIC
PERSPECTIVES
Plamen Oresharski
MINISTER OF FINANCE
10 December 2007
Sofia
2007 – RESULTS ACHIEVED
 Successful budget implementation and attainment of the
fiscal targets – minimum 3,5 % positive budget balance
 Sound management of budget revenue – growth of around
20 % in the first year of membership
 Additional investment expenditure made
 Approved program documents – NSRF and OPs
 Prepayment of government debt and Agreement for
Settlement of the Iraqi Debt– parameters favourable for both
parties
2
2007 – ECONOMIC INDICATORS
 High and sustainable economic growth - above 6%
 Financial stability and high degree of confidence
 Prudent fiscal policy
 Continued reduction of unemployment rates
 Government debt – reduced to less than 20% of GDP
 FDI cover more than 100% of the current account deficit
 Inflation - above forecasted levels
3
7
6
5
4
Source: AEAF, EUROSTAT
EU-25
4
Bulgaria
(f)
20
07
20
06
20
05
20
04
20
03
20
02
20
01
3
2
1
0
20
00
percentage
ECONOMIC GROWTH RATES
ECONOMIC GROWTH
5,0
Agriculture
 Growth is driven by domestic
demand:
3,0
 High investment activity –
favourable business
environment and positive
expectations
2,0
I .2
00
7
I.V
20
06
20
05
20
04
20
03
20
02
0,0
-1,0
-2,0
Source:NSI
5
Industry
1,0
20
00
 Quickly growing
consumption
Services
4,0
20
01
 Industry is the most dynamic
sector of the economy (real
growth of 9.1% for H107)
INFLATION
12
Harmonized consumer price index
10
8
6
 Internal factors include higher
domestic demand and the rise
of electricity prices.
4
2
0
1
'2006
6
 Accumulated inflation end of
October reached 8.5% mainly
due to higher foodstuff prices
resulting from droughts and the
rise of international food and
energy prices.
4
Source: NSI
7
10
1
'2007
4
7
 Sales to non-residents made on
the domestic market also
account for part of the increase
of foodstuff and catering
10
services prices.
BALANCE OF PAYMENTS DEFICIT
AND FDI
Sources: BNB, AEAF
Current account deficit
FDI
4364
3935
2736
EUR mn
587
866
3807
3675
3103
2622
1851
1307
1103
903
761
855
980
972
402
1999
2000
2001
2002
2003
2004
2005
2006
I.-IX.
2007
PoB deficit covered by FDI and foreign reserve growth
%
FDI/BoP deficit (LHS)
EUR mn
Reserve (RHS)
150
12 000
9 000
100
50
6 000
147.6%
144.9%
105.6%
243.5%
190.3%
209.3%
118.4%
110.9%
103.6%
0
0
1999
2000
2001
2002
2003
2004
2005
2006
I.-IX.2007

Foreign trade accounts for the high current account deficit

In the short term high FDI and EU Funds inflows will encourage imports; Exports,
the basis whereof is expanding, are expected to rise in the coming years
7
3 000
10
FOREIGN DIRECT INVESTMENT
 Bulgaria’s accession to the
EU and the improved
business environment are
important factors for FDI
attraction
 Economic and political
stability guarantee foreign
investors’ interests
 The average annual FDI
share in GDP is expected
to be around 12-15% in the
period 2008-2010
8
Foreign Direct Investment in Bulgaria
EUR mn
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2001
2002
Total FDI
2003
2004
2005
Non-privatization share capital
2006
2007*
Sources BNB, AEAF
LABOUR MARKET (1)
3300
(thousand)
%
25
3200
20
3100
3000
15
2900
2800
10
2700
2600
5
2500
2400
0
2000
2001
2002
employment
2003
2004
2005
2006
2007 I-IX
unemployment rate
Source: NSI
10
 Higher employment and lower
unemployment in the country.

Rise of employment from
4.6% in the first nine months of
2007 y-o-y – creating new jobs
in the private sector and
increased level of economic
activity.
 Downward trend of
unemployment in the country –
average drop to 6.6% for
Q107.
LABOUR MARKET(2)
EU-25
Bulgaria
Source: NSI, EUROSTAT
25
percentage
20
15
10
5
0
2000

11
2001
2002
2003
2004
2005
2006
2007H1
Unemployment is continuously dropping from around 19% in 2001 to
around 7.4% in H107 – at present it is consistent with the average EU-25
unemployment levels.
INCOME AND LABOUR PRODUCTIVITY
Real labour productivity and wages growth, 2001=100
Source: AEAF, NSI
25%
20%
15%
10%
5%
0%
2002
2003
2004
Growth of labour productivity*
2005
2006
2007**
Growth of real wages
* GDP per person employed
** Forecast value
 In H107 GVA per employed person marks an accelerated real growth of 4.9% y-o-y.
 In the period 2002-2007 real wage has grown by 23.8%, labour productivity being
24%.
12
MONETARY POLICY TRENDS AND CURRENCY
BOARD ARRANGEMENT STABILITY
 Maintaining the CBA
stability until Eurozone
accession while preserving
the current exchange rate
 BNB foreign reserves
ensure sufficient coverage
of the monetary base
250
200
150
100
50
01
.1
.2
00
5
г.
01
.7
.2
00
5
01
г.
.1
.2
00
6
г.
01
.7
.2
00
6
г.
01
.1
.2
00
7
г.
01
.7
.2
00
7
г.
0
Foreign reserves/Monetary base
Sources: BNB, AEAF
13
BANKING SECTOR: DEVELOPMENT
AND KEY CHALLENGES
 Enhancing financial intermediation
 Regulating commercial banks’ operations consistent with
Basel II requirements
 Slowing down credit growth due to the administrative
restrictions imposed by BNB (increasing the minimum
reserve requirements as from September 2007)
 Keeping the good quality of bank credit portfolios
 Strengthening competition in the sector due to the
integration of the banking system into the common
European financial market
14
GOVERNMENT DEBT
Government debt (% of GDP)
120
 The prudent fiscal
policy ensured gradual
reduction of the
government debt
Source: MF
100
80
 Considerable
reduction of its
servicing costs– from
4 % in 2000 to 1,1 %
in 2007
60
40
20
.20
07
IX
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
0
15
MEDIUM-TERM FISCAL POLICY
 Main objectives: to contribute to the maintenance of economic
stability and sustainable economic growth
 The medium-term fiscal policy will be consistent with the Stability
and Growth Pact
 Budget balance within the Maastricht criteria while maintaining a
budget surplus
 Avoidance of pro-cyclic policy
 Emphasis on the quality of public finance and EU Funds absorption
 The medium-term fiscal policy objectives are provided for in the
Convergence Program of the country for the period 2007-2010
16
ECONOMIC POLICY COMMITMENTS
 Activating labour supply, improving labour market flexibility
 Public sector wages will not govern private sector behaviour
 Streamlining the number of persons employed in the public sector
 Improving business environment and adopting a Better Regulation
Program
 Encouraging competition and improving market liberalization
 Prudent risk management in the financial sector
17
FISCAL CONVERGENCE –
BUDGET SURPLUS
Source: EUROSTAT
5
4
3
2
1
0
-1
-2
-3
2000
18
2001
2002
2003
2004
2005
2006
2007e
FISCAL CONVERGENCE –
GOVERNMENT DEBT LEVEL
Source: MF, EUROSTAT
80%
60%
40%
20%
0%
2000
19
2001
2002
2003
2004
2005
2006
2007e
CONVERGENCE OF
LONG-TERM INTEREST RATES
Source: AEAF, EUROSTAT
9
percentage
8
7
Reference value
Bulgaria
6
5
4
3
2002
20
2003
2004
2005
2006
21
Source: AEAF, EUROSTAT
20
18
16
14
12
10
8
6
4
2
0
20
10
20
08
20
06
20
04
20
02
Bulgaria
Reference value
20
00
19
98
percentage
INFLATION CRITERION
READINESS FOR EU FUNDS ABSORPTION
 The implementation of the National Strategic Reference Framework
and the Operational Programs whereby it is implemented has been
launched
 The European Commission officially approved NSRF on 22 June
2007
 All OPs have been officially approved as of the beginning of
November 2007
 Pending approval of the Rural Development Program and OP
Fisheries and Aquaculture
 Institutional and administrative capacity
 Audit and internal control systems; transparency of EU funds
management
22
MINISTRY OF FINANCE
THANK YOU!
PLAMEN ORESHARSKI
MINISTER OF FINANCE