Sofia drops 2002 growth forecast under IMF pressure

SOFIA – Bulgaria has dropped its forecast for growth in 2002 under pressure from the International Monetary Fund from 4.5 percent to four percent, Finance Minister Milen Veltchev announced on Friday. In the wake of current events in the world economy after September 11 (when terrorists attacked the USA), we have decided with the IMF council to reduce our growth forecast from 4.5 percent to four percent, Veltchev told a press conference. We believe it is a reasonably conservative economic planning measure for (forecast) income, so that we will not be surprised next year, he added. It is not the first time that the IMF has checked Sofia in the past few weeks, as the government of Prime Minister and former child king Simeon Saxe-Coburg prepares its first budget. Saxe-Coburg returned from exile and swept to victory in June’s general election, promising to revitalize the country’s economy within 800 days. In August he announced radical measures to boost the country’s economy, many of which were scrapped this month under pressure from the IMF, which recommended more prudent fiscal policies. Last week the Bulgarian government announced its budget for 2002, based on 4.5-percent growth and a deficit of 0.8 percent. The deficit level has remained the same in the new forecast. The main driving force behind growth will be Bulgarian exports and a slower rise in internal consumption, Veltchev said. But the reduction in growth expectation will lead to a drop in forecast income of between 20.5 million and 25.6 million euros (40 and 50 million leva) from that which could have been achieved with a growth of 4.5 percent, according to the Bulgarian minister. (AFP)

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