/ world today news/ The growth of the economy for this year is expected to be 2.1%, Finance Minister Petar Chobanov announced at an extraordinary press conference. The new estimates are recorded in an updated three-year forecast released for public consultation. In the budget for this year, it was recorded that GDP growth will be 1.8%.
As reasons for optimism, Chobanov pointed to the new forecasts of the European Commission and the IMF for the European and world economies. The EC raised the expected growth to 1.7%, and the IMF to 1.6%. EBRD even reached 2% for 2014.
Domestic demand is also reviving because confidence is returning, the labor market is recovering and there is a real increase in incomes, Chobanov pointed out as a second reason for optimism. He also predicts that the trend of increasing growth will be sustainable – in the forecast for the period 2015 to 2017, his department predicts GDP growth by 2.6 and 3.4%, respectively.
The third factor that would drive our economy, according to Minister Chobanov, would be investments. He expects them to increase to 3% of GDP and to be held at these levels mainly because of the increased capital spending that the government is planning.
Inflation will remain relatively low this year under the influence of the expected favorable situation on the international commodity markets, the Ministry of Finance also plans. Experts expect that in 2015
inflation will accelerate to 2.4%, but then slow to 1.7-1.8%
“Expectations are that the deflationary trend since the beginning of the year will be overcome,” he assured. The reason we strive for this is that mild inflation acted as “fuel” for the recovery of the economy.
According to Minister Chobanov, the cabinet will fulfill its commitment to smoothly increase incomes during the next three-year period.
The forecast assumes that the minimum wage will be increased from BGN 340 in 2014 to BGN 380 from January 1, 2015 and to BGN 420 from January 1, 2016. The ultimate goal is that from January 2017 it will reach BGN 450
The maximum insurance income will also rise, becoming BGN 2,600 next year, and in 2017 it will reach BGN 3,000.
After BGN 100 million was set aside this year to support pensioners, the government will maintain this policy for the next 3 years.
The forecast predicts that about 265 million will be bet for the increase
on pensions, and £100m for Easter and Christmas top-ups in each of the next three budgets until 2017.
“Pensions are raised automatically because of the Swiss rule. For other social payments – we are now increasing the money for children with disabilities from BGN 240 to BGN 270. Discussions on the other components – maternal and children’s, for example – will be discussed in September, Chobanov also said. the idea of taxing wasteland will also be discussed with the municipalities.According to him, this will happen in parallel with the budget procedure for 2015, to which the programs and projects for the next year will be attached and clarified in advance.
The tax and insurance policy of the cabinet in the next 3 years will be
predictable, without sudden movements and upheavals while maintaining fiscal stability as a factor for economic growth, Minister Chobanov promised.
Therefore, the main priority set in the updated forecast will be
preservation of low tax rates for companies and for the income of citizens as an important incentive for investment, economic growth and employment and stability, Chobanov emphasized.
The updated three-year forecast of his department also predicts that unemployment will drop slightly to 12.8% this year. The latest figures show that in February 2014 it rose to 13.1%. The plan is to
2017 unemployment to drop to 10.9%. Experts point to higher economic activity as factors for this. The cabinet will also work to reduce the deficit. Expectations are that by 2017 it will drop to 0.9% of GDP from 1.5% in 2015 and from 1.1% in 2016. Chobanov assured that by the end of February the deficit was lower from this one in February 2013.
The Minister of Finance also explained that in managing the debt in the next 3 years, he will focus on securing the necessary resources for budget financing and
refinancing of old debt at optimal price and degree of risk. We will monitor the international markets before issuing new debt, Chobanov said in response to a question when the planned BGN 3 billion will be withdrawn. “The ECB decided not to do anything against deflation. Our expectations were that he would start buying assets and thus lower the yield on securities. If she had made a different decision, we would have issued immediately,” Chobanov said. He announced that a new debt management strategy is being prepared. It will set the level of indebtedness to fall to 22.9% of GDP in 2017. As reasons for its relative growth until then, he pointed to the need to refinance old debt and inherited budget deficits.
The total level of revenues until 2017 will be within 37-38% of GDP, and of expenses – up to 37.9%, which means a gradual reduction of the deficit.
They also increase wages according to the Swiss rule
It is possible that from 2015 the growth of the minimum wage will be determined by an automatic mechanism based on inflation, the average wage and the poverty line, and not by an administrative decision of the government. This became clear from a statement by the Minister of Labor and Social Policy, Hasan Ademov.
“There is an understanding from the Ministry of Finance, let’s hope that we will also convince the employers,” said Ademov.
The mechanism developed by the Ministry of Social Affairs envisages that the minimum wage is determined by a formula based on inflation and average wages in the country. It must not be less than 35% and more than 55% of the average salary.
According to preliminary calculations, the growth for next year will be BGN 40-50, as predicted by the government, explained Ademov. For now, it foresees an increase in the minimum wage by BGN 40 each year.
3.7 euros is the average hourly wage in Bulgaria compared to 23.7 euros for the entire EU, the minister said at a conference for the working poor, organized by KT “Podkrepa”.
Businessmen are to blame for the low pay in our country, announced the president of the trade union, Konstantin Trenchev. “How can Banev and Mityo Garneto organize an efficient work process,” he asked.
The poor fewer by 73,300 compared to 2008
The poor in Bulgaria decreased by 73,300 people at the end of last year compared to 2008. This was recorded in the national social report for 2013 and 2014, prepared by the Ministry of Social Affairs.
However, the reasons are mainly death and emigration, the report makes clear. The poor over the age of 65 decreased by 58,300 people, and those in the 8-64 range by 32,400 people. The state’s conclusions are that the poor are decreasing in number because of the overall decline in the country’s population. In 2012 alone, the number of people living in Bulgaria decreased by 45,000 people, the report says.
At the same time, however, the number of children living in poverty (ages 0-17) increased by 17,500.
Nevertheless, the Ministry of Social Affairs reports partial success in achieving the goal of reducing the poor in the country by 260,000 people by 2020.
In 2014, the state allocated BGN 183,205,800 to finance social services for the poor, which is BGN 6,168,200 more than in 2013, the report also states.
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