IMF Wraps Up New Head First Visit to Bulgaria

The IMF mission was headed for the first time by Ms. Catriona Purfield, who is pictured here together with Bulgaria's Finance Minister Simeon Djankov. Photo by Bulgara's Finance Ministry

The visit of a mission of the International Monetary Fund to Sofia, which started on September 23 and featured regular bilateral discussions on economic policies with the Bulgarian authorities, ends on Monday.

The mission was headed by Ms. Catriona Purfield, who has recently assumed mission chief responsibilities for Bulgaria. This was Ms. Purfield's first visit to the country. Mr. Tonny Lybek, IMF's Regional Resident Representative in Bulgaria and Romania participated in the meetings as well.

The mission met with officials from the Ministry of Finance, the Bulgarian National Bank, other governmental agencies, as well as representatives from the private sector, including banks and industry, unions, and non-government organizations.

Bulgaria's seasonally adjusted gross domestic product marked an increase of 0.5% in the second quarter compared to the first three months of the year thanks to a rise in exports, pulling the country out of recession, the prime minister announced earlier this week.

At the beginning of March the International Monetary Fund projected Bulgaria's budget deficit to stand at 1,8% of gross domestic product this year, which totals nearly BGN 1,2 B.

The Washington-based global lender forecast this year's inflation at 2,2%, economic growth at 0,2%, and the current-account gap at 5,5%.

A month later however the center-right government dropped its plans for applying for ERM II after raising the alarm that the 2009 budget gap was 3.7% of gross domestic product rather than the 1.9 % due to unaccounted procurement deals.

The European Union's poorest country is currently going through its first recession in 12 years after a three-year lending boom stalled and foreign investments dried up.

Earlier this year, the government adopted a package of austerity measures, freezing public pays and pensions in a bid to reduce the bloating deficit.

The consolidated budget deficit exceeded BGN 1.5 B in the first six months of 2010 due to a fall in revenues and a rise in spending for social payments.

The cabinet midterm fiscal policy plans envisage that Bulgaria will cut twice its fiscal shortfall to 2.5% of gross domestic product next year.

It revised up to 1% its economic growth forecast for this year, pinning its hopes on increasing exports.

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