The conclusions of the International Monetary Fund mission, which visited Sofia during the period May 10-20, have expressed optimism about the Bulgarian economy and state finances.
The visit was part of the IMF's surveillance under Article IV of the Articles of Agreement. The mission, headed by Catriona Purfield, met with officials from the Ministry of Finance, the Bulgarian National Bank and other government agencies, as well as representatives from the private sector, including banks, industry and unions.
"The Bulgarian economy has adjusted swiftly following the recent crisis. The challenge going forward will be to accelerate ongoing reforms to recover growth potential, create jobs, raise incomes, and address age-related pressures, while also maintaining and rebuilding buffers with a view to enhance macroeconomic resilience against shocks," Catriona Purfield, IMF Mission Chief for Bulgaria, said at the end of the visit.
According to data examined by the IMF, Bulgaria's exports have rebounded above pre-crisis levels and are expected to propel real GDP growth to 3% in 2011, through rebalancing towards the export sector.
This is said to be helping offset slower growth in domestic consumption and in precautionary savings. Imports remain somewhat subdued but the current account is moving closer to balance. Higher food and fuel prices are projected to increase inflation to 4.25% in 2011, before easing to 3% in 2012.
Purfield also commented that, "The structural reforms listed in the National Reform Program will be the key to lifting growth potential. Already, a good start has been made in implementation. Tailoring training and education to employer needs, while strengthening job search services will help tackle unemployment and raise labor productivity over time. Noticeable progress has recently been made in absorbing EU structural funds. The envisaged amendments to the Public Procurement Law are expected to further accelerate the absorption. More predictable contract enforcement will also help improve Bulgaria's reputation as a good destination for foreign direct investments. The banking system continues to weather the economic crisis well and banks remain well-capitalized .." she continued "The capital adequacy ratio at the end of March was 17.7%, more than twice the EU minimum and we expect lending to begin to recover this year."
The IMF has further praised the initiative of the Bulgarian Finance Minister Simeon Djankov to amend the Constitution in order to set limits on budget deficit, through a Finance Stability Pact. "The proposal of a Financial Stability Pact will send a strong signal of Bulgaria's commitment to prudent fiscal policies, which we endorse and the government is on track to meet its 2011 budget targets." the IMF mission concluded.
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The visit was part of the IMF's surveillance under Article IV of the Articles of Agreement. The mission, headed by Catriona Purfield, met with officials from the Ministry of Finance, the Bulgarian National Bank and other government agencies, as well as representatives from the private sector, including banks, industry and unions.
"The Bulgarian economy has adjusted swiftly following the recent crisis. The challenge going forward will be to accelerate ongoing reforms to recover growth potential, create jobs, raise incomes, and address age-related pressures, while also maintaining and rebuilding buffers with a view to enhance macroeconomic resilience against shocks," Catriona Purfield, IMF Mission Chief for Bulgaria, said at the end of the visit.
According to data examined by the IMF, Bulgaria's exports have rebounded above pre-crisis levels and are expected to propel real GDP growth to 3% in 2011, through rebalancing towards the export sector.
This is said to be helping offset slower growth in domestic consumption and in precautionary savings. Imports remain somewhat subdued but the current account is moving closer to balance. Higher food and fuel prices are projected to increase inflation to 4.25% in 2011, before easing to 3% in 2012.
Purfield also commented that, "The structural reforms listed in the National Reform Program will be the key to lifting growth potential. Already, a good start has been made in implementation. Tailoring training and education to employer needs, while strengthening job search services will help tackle unemployment and raise labor productivity over time. Noticeable progress has recently been made in absorbing EU structural funds. The envisaged amendments to the Public Procurement Law are expected to further accelerate the absorption. More predictable contract enforcement will also help improve Bulgaria's reputation as a good destination for foreign direct investments. The banking system continues to weather the economic crisis well and banks remain well-capitalized .." she continued "The capital adequacy ratio at the end of March was 17.7%, more than twice the EU minimum and we expect lending to begin to recover this year."
The IMF has further praised the initiative of the Bulgarian Finance Minister Simeon Djankov to amend the Constitution in order to set limits on budget deficit, through a Finance Stability Pact. "The proposal of a Financial Stability Pact will send a strong signal of Bulgaria's commitment to prudent fiscal policies, which we endorse and the government is on track to meet its 2011 budget targets." the IMF mission concluded.
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