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Too big to fail or to be saved
When a year ago the first signs for liquidity issues of the American banks emerged, the dominating expectations were that the crisis will affect particular segments of the financial sector, but not the entire financial system. With the aim to improve liquidity the Federal Reserve decided to act aggressively, lowering the target ... -
Is the Bulgarian industry about to disappear
The most reliable statistics about the development of material production in Bulgaria in our opinion is the NSI data for foreign trade. In the twelve months before June the export is growing at 20%, measured in euro (some EUR 2.5 billion more), in comparison with the previous 12-month period. Bulgaria tends to become even more o... -
Risks before the financial health of Bulgarian households
Theoretically examined, upward price dynamics, combined with rising cost of the credit resource could in begin to reflect unfavorably on the household financial wealth – in other words, on their ability to service their current debt and on their marginal propensity to take on more credit. Although the monetary statistics has in ... -
Could the high economic growth in Bugaria be kept
On the day of the Lehman brothers bankruptcy the Bulgarian official statistics reported GDP data for Q2 2008. The contrasts between the bad news on the capital markets and the good news of the 7.1% growth shocked the broad audience. What is more, a month ago the NSI forecasted (based on preliminary data) that the real growth for... -
Effects of BNB credit restrictions one year later
Exactly one year ago BNB decided to raise minimal required reserves to 12% of the deposit base, with the aim being to reduce the probability of overheating. The foundation of this decision is the rationale that the rapid credit expansion leads increasing inflationary pressure and expanding current account deficit. In the state ... -
How to reduce the social insurance burden – four advices for policy makers
There are several possible ways to reduce the social insurance burden. Each one will produce the same effect – decreasing the difference between employer’s labor expenses and the employee’s net payment, while being a different mechanism. 1/ Direct reduction of the mandatory contributions’ rate. The rate is so high right now (mo... -
760 thousand employed more – possible, but only with labor market reforms
The National statistical institute announced the latest data on the labor market in Bulgaria last week. The statistics can be subject to mixed opinions. “Good news” is to a large extent obvious to the observers of the Bulgarian labor market in the recent years: - only in four years (from mid-2004 on) the economy has generated e... -
One year after the beginning of the financial crisis effects for the Bulgarian economy are relatively mild
One year later global crisis effects for the Bulgarian economy seem relatively mild. The emergence of these effects has been for now visible in two dimensions – rising cost of financial resource (domestic and international) and “cooling down” of the dynamics on the capital market after a few years of fierce development. For the...