IMF Chief, Kristalina Georgieva, Warns Bulgaria Against Rising Deficit, Urges Fiscal Discipline

Bulgaria cannot afford to allow its budget deficit to increase, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has warned in an interview with Bulgarian National Television (BNT), calling on the authorities to exercise caution in their fiscal policy.

According to Georgieva, Bulgaria’s economy is developing well despite the ongoing political crisis, and the country is already beginning to benefit from the adoption of the euro.

She said it is still too early to say what the level of inflation will be – an issue of major concern for Bulgarians. In her view, this will become clearer in the coming months. However, she noted that in other countries which have joined the eurozone, the one-off inflation effect ranged between 0.1 and 0.3 percent.

Kristalina Georgieva, Managing Director of the IMF, said:
“The first benefits of joining the eurozone are already visible. We are paying less to service Bulgaria’s external debt. I expect to see greater investor interest in Bulgaria and, of course, more tourists coming to the country.

“Overall, our assessment of Bulgaria is positive, but Bulgaria must be careful with its fiscal policy – it cannot afford for the deficit to grow. We have made several recommendations in this regard. I hope that when there is a government, it will pay attention to them.

“Bulgaria should also be very careful about how it moves forward with European funds. There has been significant progress in this area, and it is important that this continues.”

Georgieva added that she believes many people in Bulgaria are disappointed with politicians, which explains the country’s low voter turnout. This, she said, has resulted in parliaments that are unable to form stable governments.