Economic Freedom Index

(Ryan McGuire, CC0)

European Commission predicts GDP growth in Bulgaria

Estonians buy new cars

Economic Freedom Index

The Wall Street Journal and The Heritage Foundation published its annual Index of Economic Freedom 2016. The index is prepared based on the implementation of economic freedom principles in 186 countries. “For over twenty years the Index has delivered thoughtful analysis in a clear, friendly, and straight-forward format. The Index (…) is poised to help readers track over two decades of the advancement in economic freedom, prosperity, and opportunity and promote these ideas in their homes, schools, and communities,” The Heritage Foundation writes on its website.

The countries are divided into five categories: Free Countries, Mostly Free Countries, Moderately Free, Mostly Unfree and Repressed. The leaders are: Hong Kong, Singapore and New Zealand with overall results of – respectively – 88.6 points, 87.8 points and 81.6 points (where 100 points mean totally free country, 0 points mean totally repressed). The CEE countries are ranked:

  1. Estonia – ranked 9 (with 77.2 points)/ Mostly Free
  2. Lithuania – ranked 13 (with 75.2 points)/ Mostly Free
  3. Czech Republic – ranked 21 (with 73.2 points)/ Mostly Free
  4. Latvia – ranked 36 (with 70.4 points)/ Mostly Free
  5. Poland – ranked 39 (with 69.3 points)/ Moderately Free
  6. Macedonia – ranked 47 (with 67.5 points)/ Moderately Free
  7. Hungary – ranked 58 (with 66.0 points)/ Moderately Free
  8. Albania – ranked 59 (with 65.9 points)/ Moderately Free
  9. Bulgaria – ranked 60 (with 65.9 points)/ Moderately Free
  10. Romania – ranked 61 (with 65.6 points)/ Moderately Free
  11. Montenegro – ranked 65 (with 64.9 points)/ Moderately Free
  12. Serbia – ranked 77 (with 62.1 points)/ Moderately Free
  13. Kosovo – ranked 84 (with 61.4 points)/ Moderately Free
  14. Slovenia – ranked 90 (with 60.6 points)/ Moderately Free

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Bulgaria and the EU

The European Commission released its winter economic forecast on February 4th. According to the report “ the EU is entering its fourth year of recovery, and growth continues at a moderate rate, driven mainly by private consumption”. The other positive factors are: low oil prices, favorable financing conditions and the low exchange rate of euro. The negatives that will contribute to growth are: the slow-down in China and other emerging markets, weak global trade and geopolitical and policy-related uncertainty.

The economic growth of the Euro area is projected to be 1.6 per cent in 2015, 1.7 per cent in 2016 and 1.9 per cent in 2017. The first country we will analyze is Bulgaria:

  • GDP growth: 2.2 per cent in 2015, 1.5 per cent in 2016, 2.00 per cent in 2017. “The growth in 2015 was driven mainly by exports and dropping oil prices, while the boost from factors such as the absorption of EU funds is expected to weaken this year. In 2017 the GDP is to recover due to domestic demand which is expected to increase,” predicts EC;
  • The public debt-to-GDP ratio is set to increase from 28.2 per cent in 2016, 29.7 per cent in 2016 and further to 30.7 per cent next year;
  • Deflation during the whole 2016, with inflation returning in the last quarter of this year and rising to 0.9 per cent in 2017;
  • The country’s general government deficit: 2.5 per cent in 2015, 2.3 per cent in 2016 2 per cent of GDP in 2017. According to EC report “the decrease is due to higher revenues from taxes – improved tax administration, increase in excise duties and social security contributions).
  • Unemployment rate: 10.1 per cent in 2015, 9.4 per cent in 2016, 8.8 per cent in 2017.

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Estonia

“The number of new cars sold in Estonia in January 2016 was 1,785, which is 9.9 per cent more than in the same month last year. New cars made up to 54 per cent of the total import of cars to Estonia in January,” Baltic Course informs. The data comes from the association of Estonian car dealers and service companies AMTEL. It shows that Estonians buy small and medium cars (the sales were up – respectively – 11 per cent and 43 per cent y/y). But Estonians also like SUVs (20 per cent of total sales in December and 34 per cent in January). The most popular brands are: Toyota which sold 264 new cars, Honda with 158 units and Skoda which sold 153 units. Sales of utility vehicles dropped by 3.4 per cent y/y – to 476 new utility vehicles sold in January. “The truck segment was topped by Volvo and Scania with respectively 61 and 30 trucks sold,” Baltic Course reports.

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What’s up in indexes?

BUX (of Budapest) grew by 0.69 per cent – increasing from 23395.73 index points Wednesday to 23556.51 index points Thursday, February 4th. From year-end it dropped by 1.52 per cent.

BET (of Bucharest Stock Exchange) increased from 6289.55 index points Wednesday, February 3rd to 6393.99 index points Thursday, February 4th. It’s up 1.66 per cent d/d but dropped by 8.71 per cent from year-end.

PX (of Prague) climbed from 886.72 index points Wednesday, February 3rd to 897.48 index points Thursday, February 4th. It’s up 1.21 per cent d/d but from year-end the index lost 6.15 per cent.

WIG20 (of Warsaw) grew by 2.85 per cent – increasing from 1739.08 per cent Wednesday, February 3rd to 1788.65 index points Thursday, February 4th. From year-end dropped by 3.79 per cent.

OMXT (of Tallinn) increased from 891.31 index points Wednesday, February 3rd to 886.20 index points Thursday, February 4th. It dropped by 0.57 per cent d/d and by 1.42 per cent from year-end.

OMXR (of Riga) was up 0.43 per cent d/d and up 4.14 per cent from year-end. It increased from 616.27 index points to 618.95 index points Thursday, February 4th.

OMXV (of Vilnius) increased from 486.61 index points Wednesday, February 3rd to 487.37 index point Thursday, February 4th. So it’s up 0.15 per cent d/d and by 0.28 per cent from year-end.

SAX (of Bratislava) grew by 1.06 per cent Thursday, February 4th from 306.67 index points Wednesday to 309.91 index points. From year-end it’s up 6.01 per cent.

SOFIX (of Sofia) lost 0.12 per cent – decreasing from 448.76 index points Wednesday, February 3rd to 448.24 index points Thursday, February 4th. From year-end it dropped by 2.75 per cent.

UX (of Kyiv) lost 1.20 per cent – falling from 637.82 index points Wednesday February 3rd to 630.17 index points Thursday, February 4th. From year-end it lost 8.12 per cent.

CROBEX (of Zagreb Stock Exchange) lost 0.14 per cent Thursday, February 4th. It closed at 1605.85 index points while the day before it closed at 1608.18 index points. From year-end it dropped by 4.96 per cent.

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