Forecasting public expenditure by using feed-forward neural networks

Figures & data

Figure 1. Public expenditure in GDP in CEE countries (%) Source: EUROSTAT database, 2000–2013.

Table 1. Public revenues of GDP in selected CEE countries (%).

	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
Bulgaria	40.9	37.9	38.3	39.8	38.1	36.1	39.4	39.3	36.4	34.1	32.6	34.7	37.1
Czech Republic	37.2	38	42.1	39.4	38.7	38.5	39.3	38.1	38.1	38.6	39.6	39.8	40.7
Hungary	43.3	42.2	42.1	42.5	42	42.5	45.2	45.3	46.2	456.2	44.4	46.4	47.3
Poland	37.4	37.7	37.9	37.4	38.9	39.7	41.2	40.3	40.1	38.9	39.5	40.8	38.2
Romania	32.6	32.9	31.7	32.2	32.3	33.1	35.4	33.4	31.8	33	33.7	33.4	32.8
EU-27	−	−	−	−	−	−	44.4	44.5	44.1	436	44	44.7	45.4

Source: EUROSTAT database 2000–2013.

Table 2. GDP growth and public deficit/GDP in CEE countries.

	2014		2015		2016
	GDP growth	Public deficit	GDP growth	Public deficit	GDP growth	Public deficit
Romania	3.0	−1.8	2.7	−1.5	2.9	−1.5
Bulgaria	1.4	−3.4	08	−3.0	1.0	−2.9
Czech Republic	2.3	−1.3	2.5	−2.0	2.6	−1.5
Poland	3.3	−3.6	3.2	−2.9	3.4	−2.7
Hungary	3.3	−2.6	2.4	−2.7	1.9	−2.5

Source: European Commission, 2015 Winter Forecast.

Table 3. Unemployment rate.

	2014	2015	2016
Romania	7.0	6.9	6.8
Bulgaria	11.7	10.9	10.4
Czech Republic	6.1	6.0	5.9
Poland	9.1	8.8	8.3
Hungary	7.7	7.4	6.6

Source: European Commission, 2015 Winter Forecast.

Table 4 Forecast results and functions for the public expenditure by function in the selected CEE countries during 2014-2016

Indicator/Year	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	RMSE 2015	2016	RMSE 2016
Forecast 2014–2016 Bulgaria
Expenditure for social protection	15	13.3	14.4	13.5	11.3	11.1	12.2	13.1	11.2	13.6	14.3	12.9	12.9	14	15	15	0.01	14.6	1.5E-09
Health public expenditure	3.3	2.5	4.5	5.1	6.6	6.7	4.2	3.1	4.5	4.4	4.2	4.6	4.6	4.3	4.6	4.3	0.01	4.5	0.0007
Education public expenditure	4.4	3.8	3.9	4.4	4.2	4.1	3.9	3.9	4.4	4.6	4.1	3.8	3.5	3.7	3.7	3.7	1.E-04	4	1.4E-11
General public services expenditure	9	8.9	7.1	4.3	5.5	6.1	4.7	7.6	5	7.4	3.6	3.8	3.7	2.4	2.1	2.6	1.E-08	3	0.003
Economic affairs public expenditure	3.5	4.2	3.7	5.5	5	4.8	4.6	5	5.7	4	5	4.2	5.2	5.9	5.1	6.2	8.E-13	5.8	2.E-13
Forecast 2014–2016 Czech Republic
Expenditure for social protection	13.4	13.3	14.7	14.6	14.1	12.8	12.7	12.9	12.9	14	13.9	13.6	13.8	12.8	13.4	13.7	1.4E-11	13.9	2.3E-11
Health public expenditure	5.7	6	6.2	6.4	7.3	7.2	7.2	7.1	7.2	8	6.4	7.8	7.8	5.9	4.7	6	0.23	6	0.007
Education public expenditure	4.1	4.4	5.2	5.2	4.8	4.8	4.9	4.7	3.9	4.4	4.3	4.5	4.8	3.7	3.1	3.1	0.0015	3.1	3.1E-13
General public services expenditure	3.7	4	4.4	4.9	4.7	5.2	4.3	4.2	4.2	4.8	4.5	4.6	5	4.5	4.4	4.6	1.E-11	5	0.004
Economic affairs public expenditure	7.3	9.4	8.9	8	7.5	6.9	7.1	6.9	7.2	7.6	6.8	6	5.6	6.0	5.9	6.3	7.E-06	6.5	0.0009
Forecast 2014–2016 Hungary
Expenditure for social protection	19.3	14.5	15.4	15.9	16	17	17.6	17.3	17.7	18.3	17.2	17.1	17.1	14	13.5	13.1	0.05	13.1	0.004
Health public expenditure	5.9	4.9	5.5	5.7	5.5	5.6	5.6	4.9	4.9	5	5	5.1	5.2	5	5	5.3	2.5E-08	5.3	4.6E-06
Education public expenditure	4.5	5.3	5.8	6.2	5.8	5.9	5.8	5.3	5.1	5.1	4.9	4.7	4.8	4	4	4.1	1.E-12	4.1	3.5E-13
General public services expenditure	9.9	10.6	9.8	9.2	9.8	9.6	9.7	9.6	9.4	10.3	9.2	8.8	9	8.3	8.5	9	8.E-12	8.9	0.007
Economic affairs public expenditure		5.7	7.6	5.9	5.7	5.8	6.4	6.5	5.7	5.5	5.8	7.2	6.2	6.5	6.5	6.8	0.08	7.1	4.7E-05
Forecast 2014–2016 Poland
Expenditure for social protection	19.5	20.8	18.3	18.8	17.6	17	16.9	15.7	15.6	16.5	17.1	15.9	16.1	13	12.7	12.8	0.008	13.7	0.0015
Health public expenditure	5.5	5.8	4.4	4.3	4.2	4.4	4.6	4.6	5.1	5.1	5.2	4.7	4.6	4	3.9	4	1.1E-05	4.1	6.5E-06
Education public expenditure	4.9	5.4	6.1	6.1	5.7	6.1	6	5.7	5.1	5.1	5.2	5	5.5	4.8	5	5	3E-11	5.3	1.1E-12
General public services expenditure		6	6	6.3	6.3	6.3	6	5.6	5.4	5.8	5.9	5.8	5.9	5.5	5.7	5.4	1.5E-11	5.3	0.0017
Economic affairs public expenditure		3.4	3.5	3.4	3.4	3.8	4.4	4.5	4.9	5.3	5.7	5.6	4.7	5	4.8	5	1.10E-06	5.1	0.0004
Forecast 2014–2016 Romania
Expenditure for social protection	13.2	13.2	10.4	9.3	9.6	9.8	9.7	9.9	11.8	14.2	13.8	14.1	13.6	11.5	11.5	11.1	2E-10	11.1	7.5E-06
Health public expenditure	3.5	3.6	4.9	3.5	3.7	3.7	3.7	4.3	3.8	4.4	5	3.4	3.1	4.4	4.1	4.1	0.22	4.3	0.024
Education public expenditure	2.9	3.3	4	3.5	3.7	3.6	4.1	4.2	4.25	4.3	3.5	3.1	3	3	3.2	3.3	1.8E-05	3.3	1.8E-13
General public services expenditure	7.9	6.5	5.4	4.1	3.9	3.3	3.3	4.3	4.7	4.2	4.4	4.8	4.9	3.4	3	3.2	7.9E-10	3.3	3.3E-07
Economic affairs public expenditure	2.4	2.6	4	5	5.3	5.3	6.9	6.8	6.8	6.8	7	6.6	6.2	4.6	4.5	3.5	8E-10	3.5	0.257
Health public expenditure = f(Total population, Expenditure for social protection, General public services expenditure, Unemployment rate, Share of old-age population of total population, The rate on inflation, Inequality of income distribution, People with risk of poverty of social exclusion, Old-age dependency ratio, Public debt/GDP, GDP, Public revenues of GDP)
Education public expenditure = f (GDP, Unemployment rate, Total population, Rate on inflation, Inequality of income distribution, People with risk of poverty of social exclusion, Expenditure for social protection, General public services expenditure, Public debt/GDP, Public revenues of GDP, Health public expenditure, Share of the population under 18 years old of total population)
General public services expenditure = GDP, Unemployment rate, Share of old-age population of total population, Total population, The rate on inflation, Inequality of income distribution, People with risk of poverty of social exclusion, Old-age dependency ratio, Expenditure for social protection, Public debt/GDP, Public revenues of GDP, Health public expenditure, Education public expenditure)
Expenditure for social protection = Health public expenditure, General public services expenditure, Total population, Share of old-age population of total population, Old-age dependency ratio, Public revenues of GDP, Unemployment rate, The rate on inflation, Inequality of income distribution, People with risk of poverty of social exclusion, Public debt/GDP, GDP)
Economic affairs public expenditure = GDP, Unemployment rate, Total population, The rate on inflation, Expenditure for social protection, General public services expenditure, Public debt/GDP, Public revenues of GDP, Health public expenditure, Education public expenditure, General public services expenditure)

Source: Eurostat Database 2000-2013 and our own forecast for 2014-2016

Eurostat Database (2000-2013). Retrieved from http://ec.europa.eu/eurostat/web/government-finance-statistics/data/main-tables

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