15.09.2016

The International Monetary Fund (IMF) has revised its forecast of Bulgaria's economic growth to 3 per cent in 2016, with the expectations until recently having been for a slow-down to 2.3%. This is what Mr. Reza Baqir, IMF Mission Chief, said after his meeting with Prime Minister Boyko Borissov. The IMF experts' conclusions about the development of the Bulgarian economy, as well as the key macroeconomic forecasts and growth policies were discussed at the meeting which was also attended by the Minister of Finance Vladislav Goranov and by the BNB Governor Dimitar Radev.

The IMF Mission Chief, Mr. Reza Baqir, shared the experts' high estimation of the asset quality review and stress tests of the Bulgarian banks. According to him, the results from this unprecedented procedure demonstrated that the Bulgarian financial system was stable and secure and the institutions involved in bank regulations and supervision operated in accordance with the highest professional criteria. On his part, Prime Minister Borissov mentioned that following the bank crisis in 2014, the present government not only secured the resources needed to address the consequences from the failure of the fourth biggest bank in Bulgaria but also took all the legislative and organisational measures required to stabilise the system and to avoid such crises in the future.

All the parties present united around the opinion that the interim 2016 budget execution data showed that the end-year deficit would be lower than projected. "This is mostly due to the substantial increase in budget revenues which have grown cumulatively by over BGN 2 billion since the beginning of the term of office of Boyko Borissov's Government", Minister Goranov said. He was firm that if the Government completed its term of office and should there be no external crises, the 2018 state budget would be balanced.

Prime Minister Borissov outlined to Mr. Baqir the major institutional framework that resulted in the considerable improvement in the fight against the grey economy and smuggling. According to the Prime Minister, the regular meetings conducted under his guidance among the minister of finance, the minister of interior, representatives from the security services, the revenue administrations and the prosecutor's office, were the main tool for the considerable increase in budget revenues.

Mr. Reza Baqir outlined the key risks to the development of the Bulgarian economy according to the IMF experts. First comes the deteriorating demographic picture and the huge economic and social imbalances among the country's regions. Measures aimed at improving the SOE management and galvanising private consumption as the main driver of the economic growth were discussed at the meeting. Prime Minister Boyko Borissov and Minister of Finance Vladislav Goranov shared the opinion that the findings of the IMF mission report would be useful for the Bulgarian Government and for the decisions to be taken in the future.