on of a review of Bulgarias economic performance under a lending agreement approved in September 1998.The IMF said Bulgaria had maid significant progress in its transition to a full market economy. In a written statement, the IMF official praised government leaders in Sofia for keeping inflation and the current account deficit under control. The IMF acting chairman, Fischer, said Bulgarias economic growth was expected to remain strong. However, Fischer warned there were still some areas that bear watching. Fischer said: A strict incomes policy for state enterprises and steps to improve labor market flexibility and the business environment will help enhance competitiveness.ECONOMIC ENVIRONMENT IN BULGARIAIn Bulgaria 2000 passed to confirm the financial stabilization in the country, supported by the currency board arrangement, which was introduced in mid-1999. The Government of Bulgaria (GOB) was able to achieve most of the preliminary set indicator, co-coordinated with the IMF and the World Bank for the development of the country. Tight constraints on fiscal and monetary policy yielded remarkably low inflation at just 1%, budget surplus and moderate current account deficit. The GDP is finally on a rise after a long series of collapse, now estimated to have grown by 3.5%. Improved legislation and supervision in the banking sector has constructed more prudence and eventually ease in the crediting policies to support revival in the real sector. However, the needed real sector restructuring was again delayed, which could turn into a major obstacle for the possibility of future growth and the ability of maintaining economic stability over the medium term. Privatisation of the major enterprises from the banking and real sector is still pending, and unpopular measures for the liquidation of loss-accumulating units will still have to be taken, thus testing the political will and decisiveness of the government in the eve of coming elections.Econo...
