Bulgaria’s GDP in International Comparisons using PPPs

Abstract

The study is aimed at analysing basic methodological issues of GDP estimates converted into a common currency using PPPs in the practice of international comparisons as well as at relating these issues to estimation of real GDP for Bulgaria. The first section considers the PPPs concept and its relation to the exchange rate (ER) concept. The evolution of the ideas about PPPs concept as well as approaches to PPPs estimation is studied. The methodology and progress of the UN International Comparison Project (ICP) is described. The second section presents estimates of GDP using PPPs of international comparisons, including Bulgaria from the beginning of the century up to the present. The historical and economic changes during this comparatively long period determine three quite different by nature subperiods: until the end of World War II, under the conditions of centrally planning (1945-1989) and during the transition to a market economy (after 1989). The results of the first participation of Bulgaria in the European Comparison Programme of real GDP in 1993 are briefly described. An approach is applied to derive GDP estimates based on PPPs around a benchmark year. The importance of the problems considered for the country in connection with the urgent tasks of the transition is pointed out.