/ world today news/ How our incomes increase 4 times, investments increase 14 times, the population gets richer and everyone prospers, although 90% of people do not feel this prosperity, they only read and hear about it. Like some exotic place they know exists but don’t know because it’s impossible for them to go.
Who is to blame – those who export the data or their interpreters, is not a question – it is an answer.
Sticking your head in a hot oven, your feet in a bucket of ice water and saying that on average you feel fine isn’t a diagnosis, it’s a statistic.
Similarly, if Penka – cleaner earns 320 BGN, Maria and Ivan – office workers earn 500 and 600 BGN, driver Gencho – 700 BGN, boss – 900 BGN, and owner – 10 grand per month, then the average income in this company is around BGN 4,000. The company is a miniature model of the state, only there the roles are slightly different. Civil servant – BGN 1,200 and bonuses for BGN 1,000, expert in an energy or other state company – BGN 3,000, graduate middle class – BGN 800, journalist middle class media – BGN 700, waiter – BGN 900, salesperson – 650 BGN, a teacher – 600 BGN, a pensioner – 240 BGN, a woman in maternity without a job – 340 BGN. Average calculated income of the population – 953 BGN. The population became richer. Because a year ago the average income was BGN 948. This is a full 3% growth. The increase comes mainly from the raised salaries of the administration, of senior management in the private sector, and let’s not forget pensions, which increased by as much as 2.6%. The population became rich.
The same financial balances can be made with all the data and figures, but what caught our attention again is the growth of foreign investment – this time it is cosmic. We learn from the media that foreign investment grew 14 times in May, on an annual basis. This is an unprecedented record and we should respect it. And this time, unlike Lukarski’s phantasmagorias, it is not a lie. The question is how the numbers were looked at to “derive” this growth.
14 times per year growth, this should be billions, most readers would think, which would be a serious revival in the economy. In fact, it’s not even 100 million. We are talking about some 88.5 million euros. Because last year, in May, foreign investments were some kind of bottom from 6.4 million euros compared to May 2016, their growth is 14 times. Only that this is taking the data out of context, from the general picture, which incorrectly distorts it and creates unhealthy illusions of development and economic revitalization.
Compared to the previous month – April, when investments were 61 million euros, in May, rising to 88.5 million, the growth is insignificant. If we look only at the month, for example in April 2016, investments were three times less compared to April 2015. And the next month (May) to talk about a 14 times growth, just because we are comparing with the identical month a year earlier, is not serious. For a more objective picture, we need to look at what has been happening since the beginning of the year so far. The data for the first five months of the year show a drop in foreign investments by as much as 34% compared to those attracted in the same period of 2015.
At the beginning of the year it is even worse. The first months of 2016 – foreign investments in Bulgaria amounted to 429 million euros, which is a decrease of 45% compared to the same period last year. 14 times the height?
Even if the figures were higher, the optimism would not be justified if we look at the structure of the investments in question. Foreign investments in Bulgaria are mostly loans (debt instruments). These are the loans that foreign companies grant to Bulgarian companies in which they have a stake. That is, it is an increase in domestic indebtedness. This type of investment is sometimes made to increase the productivity of the local business, but it can also be working capital and covering debts. But even with an “ideal goal”, for the 5 months of 2016, investments in debt instruments were close to 200 million euros, which is a 50% decrease on an annual basis.
In second place (180 million euros) are the investments made in the acquisition or creation of capital, as well as in construction. Share capital is the investment of foreign persons in the capital of Bulgarian companies, as well as the purchase of real estate. However, they are twice less compared to the previous year, and the decline speaks of a decrease in investors’ interest in long-term investments in the country.
The remaining approximately 140 million euros for the 5-month period are reinvested profit. This is a triple drop compared to the same period of 2015, when it was over 370 million euros. In addition, the reported 140 million are for the first 5 months, but in reality they were entirely generated in the first quarter of the year. That is, the last two months we have zero profit reinvestment. Against this background, highlighting in the media space that investments in May grew 14 times in a year (only because they are compared to May 2015) is not just manipulative, but foolish.
Here we will not analyze the reasons for low investments and weak investment interest, and the many anomalies in our country that repel investors, but the interpretation of the numbers that creates an illusion of development. There is no such thing, at least in terms of foreign investors’ interest in our country. This, as we know, is related to new jobs, revitalization of regions, increased incomes – all desirable things.
Similar is the “improvement and optimism” regarding a change in our income. According to the latest NSI data, incomes are growing 4 times faster than expenses. This good news recently made the rounds in the media and caused widespread bewilderment. What is hidden behind the 4 times ahead growth – incomes increased by 4.2%, and expenses – by 0.9%. Just as pensions were increased – with 2.6%. This raised the lowest pension by BGN 3 to BGN 118 and 14 cents, and the average (BGN 340) “jumped” by BGN 7. The pensioner looks at this life-affirming growth and asks himself, like Chekhov: “Should I drink tea or hang myself?”
The bulletin also indicates that the average income per person from a household in the first quarter of 2016 was BGN 1,237. Here the statistics conveniently omit, or its interpreters in their ignorance, that this BGN 1,237 per person is not per month, but in total for the quarter . That is, per month, an average of BGN 412 is paid per person in the household, and that is if we assume that the household consists of 3 members – two parents and a child. Since the family income is calculated with pensions included, if we add 1 more pensioner member, the average per person is BGN 309, which is on the poverty line. What is the conclusion – the average Bulgarian lives on the threshold of poverty. And against this background, the statement – “Revenues grow 4 times faster than expenses” sounds CRIMINAL.
It is also important to note how the income of the average household is formed. In the family portfolio, wages continue to form only half of the total income (57%). This means that only one of the two parents works, or if both work, they receive low incomes. The rest of the family income comes from pensions – nearly a third (26.5%) and from self-employment. Social benefits, which are so overexposed, form only 2.8% of total household income.
Even more interesting are the data with household expenses, which for the 3 months grew by only 0.9%. We’ll focus on the basics – housing costs (water, electricity, heating, home maintenance), which decreased by 1.6%, and transport, which reported an increase of 1.4%.
The vignette has increased in price by more than 40% since January 1, and civil liability insurance – by about 10%. This is not a 1.4% increase in transport costs. The picture is similar with the costs of electricity and heating. And finally, the statement , that incomes are raised 4 times more than expenses sounds like an arrogant mockery.
Therefore, the average annual income of a person in 2015, according to NSI data, was BGN 4,953. Divided by 12 months, the average monthly income of a Bulgarian was BGN 412, which is even below the minimum wage, defined as the minimum necessary for survival . So much for the “enrichment” of the Bulgarian.
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