World Bank VP Georgieva Warns over Bulgaria Bad Loan Growth

Bulgarian World Bank VP Kristalina Georgieva (right) is a close advisor of PM Borisov (left); in the summer of 2009 her name was mentioned as a potential Deputy Prime Minister of Bulgaria. Photo by BGNES

World Bank Vice President, Kristalina Georgieva, has stated that if bad loans continue to grow in Bulgaria the situation could get complicated within a year.

Georgieva told participants at the Fourth Annual Meeting of business with the Bulgarian government, that it is “dangerous that bad loans have begun to grow and if we continue for another year we may be in a complicated situation, it could become a problem.”

According to her, the International Finance Corporation, which is part of the World Bank Group, has started a program for cleaning bad loans. She expressed hope that a significant proportion of the funds would be available to Eastern Europe.

Georgieva cited a survey, that about 86 % of the private business in Bulgaria said that the crisis has struck them as more than 30 % of firms recorded a fall in sales of over 40%.

The crisis will mean  slower world growth, more expensive and more difficult to finance lives, higher unemployment and erosion of capital, Georgieva concluded.

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