The Economy Shows Consecutive Ongoing Recovery Signals
The last tourism data published by the national statistics have shown the consecutive positive sign for Bulgarian economic recovery. After the positive export growth in November and December 2009, the foreign tourists’ number in Bulgaria for January has also increased seriously since last year. After more than a year long decline the number of foreign tourists who have visited Bulgaria marked a 14,3% growth in January 2010 compared to the same month 2009. Even if we take into account the low base from the beginning of 2009 when the tourist flow declined 10%, the January 2010 growth should not be underestimated.
The more the state "plans" the more difficult
planning becomes for the individual.
Friedrich von Hayek
planning becomes for the individual.
Friedrich von Hayek
Themes
We will be working for five months for the government even during the crisis
June 1 2010 is the day on which we will stop working for the state and start working for ourselves – more precisely at 16 hours and 23 minutes on Tuesday (1 June 2010). In 2010 Bulgarians will work for 5 months to pay various taxes and duties, i.e. to fill state treasury. The so-called “Tax freedom day” in recent years occurs at the end of May but in 2010 it will move to June.
Social security payments, rather than the VAT
During the week There was active discussion during the week whether and how to reduce the VAT in Bulgaria: a more drastic 2-percent reduction from the next year or 0.5 percent every 6 months? The news for lowering taxes should sound good, but in case there is an alternative that is far more attractive. If we tear down taxes, then let us focus on the most problematic ones, namely those on labor.
Do Not Raise the Deficit*
This week the Bulgarian President became spokesman of the creeping rehabilitation of the “virtues” of budget deficits. It seems that the Prime Minister and his colleagues see political advantages in this idea and are keen on softening the fiscal policy too. These populist positions have always easily found support in our society and have always led to heavy economic consequences. In today’s circumstances they directly undermine the stability of the currency board, which is the single sensible consensual decision in Bulgarian economic policy in decades.
“Independent Pension Reform Council” is set up
This made us set up an alternative “Independent Pension Reform Council” in which leading economists will take part. The Council’s goal will be to develop a real pension reform that will secure stability and sustainability as well as choice, when and under what conditions the employees will retire and what insurance contributions will they pay.
IME's New Campaign: "State Expenditures in Bulgaria"
The Institute for Market economics started a new campaign at the beginning of 2010, attempting through observation and analysis to asses the transparency, soundness and efficiency of public expenditures. The long term objective is to reduce the cost of government and more freedom for citizens.
On Crafts or the Story of a Shoemaker
One of the most widespread misconceptions in the modern history of the world is that the state should and can interfere in the activities of entrepreneurs and to assist business. Often, the government does it through artificially created organizations, giving them a unique and monopolistic power over many aspects of the economic life in the country.
Reducing the Administrative Burden in the EU – It Is Possible!
The initiative for reducing the administrative burden started back in 2007 after the suggestion of Commissioner Gunter Verheugen (European Commission - Enterprise and Industry). At the same time the European Commission identified the current superfluous legal regulations and in January 2007 suggested an ambitious program for reducing the unnecessary administrative burden on the business in the EU. In march 2007 the European Council approved a decision that the burden originating from the European legislation, including the national acts aiming at its implementation or transposition, should be reduced by 25% by 2012. The Council urged the member-states to simplify their national legislation aiming “relatively similar goals”.
THE BULGARIAN DEVELOPMENT BANK (BDB) EXPANSION IS NOT A GOOD DECISION
... The BDB cannot guarantee profitable projects respectively the finances received and lent from the pension funds may never come back. In this case the funds will either loose their money (savings of all insured people!) or as this is a state controlled bank, after the money sink in opaque projects, they will be refunded by the budget or the fiscal reserve. So, it is most possible to have a net loss while the only winners will be the project contractors.
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Economic Policy Review
BG Remittances
Part of disposable income in each country comes from funds earned in another country and sent or brought home. The difference between money received from abroad and paid to foreigners determines whether a country is a net exporter or importer of labor. As it could be expected, these flows have the largest positive values (as % of GDP) in less developed countries where emigration and seasonal employment in other countries are most significant*...
Part of disposable income in each country comes from funds earned in another country and sent or brought home. The difference between money received from abroad and paid to foreigners determines whether a country is a net exporter or importer of labor. As it could be expected, these flows have the largest positive values (as % of GDP) in less developed countries where emigration and seasonal employment in other countries are most significant*...
On Crafts or the Story of a Shoemaker
Imagine you are a shoemaker. You decide to open a small workshop and to earn your living through the best that you can do. You win customers and who reward your skills more often. You work hard, pay your taxes and your clients are satisfied. One day a group of strangers enters your workshop...
Imagine you are a shoemaker. You decide to open a small workshop and to earn your living through the best that you can do. You win customers and who reward your skills more often. You work hard, pay your taxes and your clients are satisfied. One day a group of strangers enters your workshop...
Bulgaria – The Country with Two Faces
Undoubtedly, this week was marked by the passions around Rumyana Jeleva’s hearing at the European Parliament. The general conclusion among the media and the public was that the incident is yet another shameful stain on the reputation of Bulgaria to Europe and worldwide. This is not far from the truth. Yes, it is required to disclose all information in her declaration of property until she was MEP and it was not done. A rule – broken...
Undoubtedly, this week was marked by the passions around Rumyana Jeleva’s hearing at the European Parliament. The general conclusion among the media and the public was that the incident is yet another shameful stain on the reputation of Bulgaria to Europe and worldwide. This is not far from the truth. Yes, it is required to disclose all information in her declaration of property until she was MEP and it was not done. A rule – broken...
Since the begining of the year
Bulgarian government spent (in leva)
Recent Studies