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Bulgaria: Prime Minister Stresses Positive Development

Published: December 10, 2013; 06:55 · (Vindobona)

Plamen Oresharski stressed that Bulgaria has performed better than expected in 2013.

Next year, the country´s economy will grow substantially, Oresharski predicts. 2014 will be a year of economic growth and development, he added. According to him, the Bulgaria was expected to remain in recession. “However, it happened to a number of other countries”. Bulgaria´s banking sector and most other sectors withstood the pressure, Oresharski stated.

Although the country´s banking sector suffer from high non-performing loans, the banking industry is still well capitalized and liquid,. The gross NPL ratio amounts to 17.2%, the average tier 1 capital quota is 15.6%. Due to the weak credit demand and the robust deposit growth, the banking sector´s liquidity is satisfying, the IMF stated at the end of November.

According to the Bulgarian government, GDP growth will come at 0.6% in 2013 and at 1.8% next year. IMF forecasts a growth rate of 0.5% for 2013 and 1.6% for 2014.

What is more, Bulgaria remained the EU leader in terms of fiscal discipline and public debt. . At the moment, Bulgaria´s public debt level comes at 17.5%. Despite a severe economic crisis after 2008, Bulgaria did not call for external aid programs. However, the 2014 budget is rather risky, the IMF criticized recently If the basic assumptions prove untrue, Bulgaria´s government will have no other choice to cut spending, the IMF commented.

Finally, Oresharski wants to promote foreign direct investments in Bulgaria. In the last years, FDI was Bulgaria´s key driver of economic growth. In order to improve the country´s competitiveness, Oresharski wants to lower the administrative burden on the economy. “Since the late 1990s, the burden was up steadily. Now it is time to act.”