Lachezar Bogdanov, economist, Industry Watch: A slight increase in the employment rate is expected at the end of 2013

- Mr. Bogdanov, according to the latest survey of the National Statistical Institute (NSI), there is a slight increase of 2.3 percentage points in consumer confidence in Bulgaria at the beginning of the year, which is a reflection of people’s expectations of a gradual improvement in their financial situation. Are these expectations justified as a whole?
- First of all, I will say that, traditionally, these surveys of the attitudes of people are reported about a year later with respect to the economic situation in the country and are to a certain extent influenced by the people’s psychology. I will remind you that such surveys registered the impact of the economic crisis on the population as late as at the end of 2009 when a number of economic indicators had already worsened. Therefore, now, I think there have been some positive economic indicators for at least a year, but these are reported only now. In this sense, NSI’s survey of the attitudes of the population is not an indicator of the economic situation but registers clearly discernible trends in many economic indicators after these have appeared. In fact, the increase in the index of consumer confidence reflects the tentative positive trends in the economy which began about a year ago.

- In this case, do you think people’s hopes for a decrease in the unemployment rate are justified, considering the fact that even Social Minister Totyu Mladenov predicted that it will remain unchanged from 2012?
- When answering the questions in the survey the respondents are not usually guided by official forecasts but by their subjective feeling whether it will be easier for them to find a job if they are looking for work. These are two different things. Therefore, we at Industry Watch, keep an eye on the number of working people, i.e. the number of the employed rather than the number of jobless people registered at labour offices. This is because the increase in the number of jobs is a positive indicator for the economy. I cannot predict the exact number of the registered unemployed. But if these, albeit tentative positive trends in the economy continue, we may certainly expect a small increase in the total number of jobs, i.e. at the end of 2013, their net number will be slightly higher than in 2012.

- Does this mean that consumer demand and spending will enjoy a marked improvement this year?
- The numbers are already climbing, as evidenced by last year's results. In the first half of 2012, Bulgaria reported the highest growth in consumer spending among EU member states. Of course, the rate of increase was a far cry from what we saw in the 2005-2008 period. Even so, while the indicator was stagnant or declining in most European countries, Bulgaria had a 2% growth.

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