IMF Mission to Focus on Bulgaria Growth, New Govt Measures

On the first day of IMF mission visit, Deputy Finance Minister Lyudmila Elkova presented a package of measures aimed at easing poverty and repairing battered trust in democracy, which the new government rushed through parliament. Photo by Finance Ministry

Economic growth prospects and developments on the labor market will top the agenda of International Monetary Fund mission in Bulgaria, it emerged at the start of its regular visit here.

A mission of the International Monetary Fund is visiting Sofia from June 27 till July 3 2013 to hold regular bilateral discussions on economic policies with the Bulgarian authorities.

The mission is headed by Ms. Michele Shannon, who has recently assumed mission chief responsibilities for Bulgaria. This is Ms. Shannon's first visit to the country.

Ms. Michele Shannon succeeds Ms. Catriona Purfield, whose term expired last year.

Meetings with officials from the Ministry of Finance, the Bulgarian National Bank, other government institutions, as well as representatives from the private sector have been scheduled.

On the first day of IMF mission visit, Deputy Finance Minister Lyudmila Elkova presented a package of measures aimed at easing poverty and repairing battered trust in democracy, which the new government rushed through parliament in a bid to placate critics right after it stepped into office.

The measures, approved by 117 votes to one abstention, include heating subsidies, a cap on utility prices, higher maternity leave allowances, pensions and civil servant salaries.

At the beginning of April the International Monetary Fund projected that Bulgaria's GDP is to increase by 1.5% in 2013, against an inflation rate of 2.3%.

The Washington-based global lender issued its forecast before the snap elections and the formation of a fragile Socialist-led government, currently facing mass protests and calls for resignation.

Embattled Prime Minister Plamen Oresharski warned last week that Bulgaria’s economy may fail to reach its target of acceleration by 1% at the end of this year.

In his words the previous government has sweetened up estimates about the economy growth.

Bulgaria’s economy grew by slim 0.4% year-on-year in the first quarter and is expected to accelerate by just 1% this year mainly due to recession in the euro zone, its key trading partner.

Oresharski’s government has pledged to stick to small fiscal deficits, avoid raising new debt and keep flat income and corporate tax rates at 10%.

Meanwhile the World Bank reduced its GDP growth forecast for Bulgaria for 2013 and 2014.
According to the latest edition of the Global Economic Prospects report, Bulgaria's GDP is to grow by 1.2% in 2013, not by 1.8%, as initially predicted.

In 2014, Bulgaria's GDP is to increase by 2.1%, instead of 2.4%, reaching a 3% growth in 2015, according to the World Bank.

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