IMF Blasts Bulgaria Govt Finance Policy, Reforms

Finance | April 14, 2010, Wednesday // 10:28|  views

Bas Bakker (pictured), the IMF’s mission chief, held a meeting with the leader of the small opposition conservative party „Order, Law and Justice“ Yane Yanev. Photo by BGNES

The International Monetary Fund has harshly criticized the Bulgarian center-right government for lack of decisive structural reforms, saying it talks too much, but acts too slow.

The statement was voiced by Bas Bakker, the IMF’s mission chief, at a meeting with the leader of the small opposition conservative party Order, Law and Justice Yane Yanev.

Bakker presented the main points in the latest report of IMF mission for Bulgaria, which is due to be discussed by the global lender Board of Directors in Washington in May.

IMF mission chief said Bulgaria’s budget deficit is expected to stand at 4 % of gross domestic product this year. He stressed that the country is facing more serious fiscal problems than expected, while its present finance policy is too risky and can trigger a deepening economic crisis in Bulgaria.

The news comes just days after the government revised sharply upwards Bulgaria's 2009 budget deficit due unaccounted procurement deals and put on hold its application for the eurozone waiting room EMR II.

During its visit to Bulgaria at the end of February, IMF 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%.

The mission warned that meeting the 0,7% deficit target this year will be “challenging” and was cautious in his comments on plans to reduce the valued-added tax rate from 20% to 18%.

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Tags: IMF, Bas Bakker, greece, Eurozone, EC President, EC, Jose Manuel Barroso, Georgi Parvanov, Bulgaria President, natural gas, gas transit, Buzek, euro, ERM II, ERM 2

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