With the recent figures on Bulgaria's economic growth coming in short of expectations - and government forecasts - the post mortem is now well under way into how the country could do better next time. A planned series of tax cuts might do the trick, many analysts say, yet whether the scheme currently promised by the administration will fit the bill seems more controversial. The predictions used…
Betraying no signs of euro fatigue after recently concluding intense negotiations on the accession chapters for EU entry, the Bulgarian government announced this week it was preparing a strategy to adopt the euro soon after 2007. While some critics have argued that such thoughts are highly premature, others suggest that of all the EU's new and prospective entrants, Bulgaria has a better chance than…
Despite measures restricting banking liquidity introduced earlier this year, the latest data released by the Bulgarian National Bank (BNB) this week suggests that we have not yet seen the end to the country's credit boom. As a result, the most widespread expectation is that new measures will soon be implemented to drain excess banking liquidity - yet the measures being suggested are not without their…
For the second time in its history of dealings with the Bulgarian government, the International Monetary Fund (IMF) left Sofia last week without a firm agreement on next year's budget. This caused some concern in the markets, especially since there were a number of difficult sticking points holding up any new compromise. Wages, the fate of the budget surplus, booming private debt and a worrying current…
Better than expected budget revenues and lower current account deficit results are proving to be a double edged sword for the Ministry of Finance these days. While the government's desire to raise budget surplus expenditure sparked a debate with the IMF earlier this month, it is now facing building domestic pressure, following some critical remarks made by President Georgi Parvanov this week. It…
Like other countries in South Eastern Europe, Bulgaria can claim some bumper harvests this year. Favourable weather conditions have helped the bounce back from last year's disappointing output, with wheat and sunflower production exceeding domestic consumption. As a result, there is now much hope for record highs in agricultural exports. Meanwhile though, sceptics are saying that given a poor grape…
With the announcement last week of the first acquisition deal since the end of Bulgaria's bank privatisation programme, many are now wondering if this will be a curtain raiser on the much-awaited consolidation process within the country's banking sector. However, sceptics say the takeover of Bulgaria's Hebrosbank by Bank Austria Creditanstalt is a one-off and true consolidation is still a couple…
Pledging more money for education, healthcare and social insurance - coupled with lower direct taxation and a higher minimum wage - the 2005 budget was finally passed by parliament earlier this week. At the same time, the political discussions and negotiations that preceded the vote helped to highlight the differences between the political parties ahead of the June 2005 parliamentary elections.…
With news last week of a record high in Bulgaria's consolidated budget surplus, there came both a sense of well-being and an immediate dispute. With a delegation from the International Monetary Fund (IMF) in town until December 16, the debate over just what to do with this surplus took place right under the watchful eyes of the global financiers. And, just as the government made strong commitments…
A statement by the leader of Bulgaria's main opposition party last week that he intended to maintain the currency board that pegs the lev to the euro at least until joining the EU in 2007, sparked a sharp reaction from the government and the IMF. Both called on the Bulgarian Socialist Party (BSP) to clarify its stance on this all-important issue. The statement has had an impact because current…
