In Q2 2018 the economic activity indicator in Bulgaria (EAI) remained close to its value in Q1. The cyclical component fell down but this was offset by the improvement in the long-term position of the economy. The preliminary estimate for the EAI in Q3 indicates a decline due to the further decrease of the cyclical component.
Most of the variables included in EAI made a cyclical downturn, with the largest contribution from the industrial production index. Similarly, a high negative influence came from the capacity utilization, international prices of non-energy commodities and petroleum, and real GDP growth in EU-28. Unlike the observed worsening of the indicators related to the external economic activity, the cyclical position of the sentiment indicators presented with the business climate, industrial orders, expectations for selling prices and employment dynamics remained close to Q1. On the positive side, the cyclical component of VAT revenues increased considerably, thus limiting the EAI downturn.
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