Medium-Term Forecastings of the Economic Growth in Bulgaria

Issues of medium-term forecasting of the economic growth in Bulgaria are considered. Econometric models are used for the purpose of medium-term forecasting of the economic growth in this country. The study is organized as follows. In the first section theoretical issues of the modlling and forecasting of the economic growth in Bulgaria as a country in transition are presented. In particular, the specificities and main patterns of macroeconomic development since the start of transition is described as an undefinite and unfavourable basis for forecasting in medium-term. The quality of statistical data (the time series) in the last over 10 years reflecting the transition economic reality is discussed as well as the nature of the applied models. In the second section medium-term forecasts for Bulgaria's economic growth based mainly on regression analysis are produced. Two alternative scenarios for Bulgaria's accession to the EU are calculated: one that assumes accession in 2007, and another that assumes that the country will not accede to the EU before 2010 (the status quo scenario). A production function is also applied taking into account the theory of endogenous growth. Finally concluding comments are given.