Bulgaria’s growth slows to 4 pct, will rebound in 2002
SOFIA – Bulgaria’s economy grew by a lower-than-expected 4 percent last year, hit by the global slowdown, data showed on Thursday, but analysts said it was still one of the strongest performances in Eastern Europe. They said the Balkan country’s growth was likely to remain robust this year and might even exceed a government target, agreed with the IMF, of 4 percent due to expected recovery in the European Union, Bulgaria’s main trading partner. Statistics office (NSI) data showed GDP rose by 4 percent last year, well below an initial estimate of 4.9 percent and the previous year’s 5.8 percent, due to a high trade deficit. In February, Economy Minister Nikolai Vassilev said Bulgaria’s GDP rose by a preliminary 4.9 percent last year, exceeding a government target of 4.5 percent as the economy performed better than expected in the fourth quarter of 2001. But International Monetary Fund and Western analysts remained more cautious and had forecast the Balkan country’s economic growth at up to 4.5 percent last year. «It (2001 GDP growth) is slightly lower than we expected but it is not a crucial issue. It is still a fine figure compared to other Central and Eastern European countries,» Reinhard Cluse, analyst at Commerzbank in London told Reuters. NSI attributed slower growth to a high trade deficit, aggravated by last year’s global slowdown. Imports increased by 13 percent in 2001 while exports rose only by 8.5 percent. Analysts said Bulgaria’s economic outlook for this year remained very positive, as the country’s reformist government seemed to be moving the country closer to its top priority of European Union membership. «We believe Bulgaria’s growth will remain robust this year and might even exceed our initial forecast of 4 percent. Bulgaria is still a success story,» said a Deutsche Bank analyst. Commerzbank’s Cluse said: «We remain quite optimistic on Bulgaria’s outlook. The government implements the agreement with the IMF and follows a prudent fiscal policy, preparations for the EU seem to be progressing, debt policy is good.» The Cabinet of Prime Minister Simeon Saxe-Coburg-Gotha has won respect among Western investors for its ambitious agenda to boost reforms in one of the poorest EU aspirants, spur growth, sell remaining state assets transparently and uproot corruption. Bulgaria’s reform efforts yielded a series of rating upgrades late last year, a new $300-million deal with the IMF and a successful swap of $1.327 billion of floating rate Brady bonds into new fixed-rate Global bonds last month.
