by Andrew Macdowall*

Reducing bureaucracy will boost competitiveness, says the IMF

Bulgaria's economic future is bright, but it must be prepared to handle the pressures of globalisation, says Michael Deppler, director of the International Monetary Fund's (IMF) European Department. His comments came in the authoritative The Report: Emerging Bulgaria 2007, produced by Oxford Business Group (OBG), the UK-based publishing research and consultancy service.

Mr Deppler pointed out that economic growth remains steady, inflation is moderate, and employment and incomes are rising. But he included an important caution: "Bulgarian authorities need to remain mindful of pressures stemming from globalisation. They need to continue to pursue and strengthen policies that enhance competitiveness. These include macroeconomic stability, a healthy financial system, a welcoming business climate, good infrastructure, an education system that delivers the required skills, and a flexible and adaptable economy."

He added: "Bulgaria has made significant progress in a number of areas over the past 10 years, such as privatisation, streamlining public administration, abolition of the portability of seniority bonuses, and improvements in the education and health system. Yet Bulgaria still ranks too low among emerging European nations in terms of various indicators of structural reform. Given the vital importance of the flexibility of product and labour markets to sustaining competitiveness, regulatory reforms must be pursued vigorously."

Mr Deppler's message also contained an important warning about pay and bureaucracy. "Wages are still set by inflexible collective agreements. Completing the long overdue electronic business registry will reduce corruption and stimulate business formation. Lower minimum capital requirements would also help. Much more progress is needed in terms of reducing administrative burdens that stifle entrepreneurship," he said.

Concerning entry into the Eurozone, Mr Deppler commented: "We do not expect the country to have problems meeting the budget deficit and public debt requirement of the Maastricht Treaty. However, meeting the inflation criterion will be a challenge. The right policies will need to be maintained to make the economy more flexible."

About Oxford Business Group

Oxford Business Group (OBG) is a UK-based publishing, research and consultancy services organisation. OBG publishes economic and political intelligence on the markets of Eastern Europe, North and South Africa, the Middle East and Asia. Through its range of print and online products, OBG offers comprehensive and accurate analysis of political, macroeconomic and sectoral developments, including banking, capital markets, energy, infrastructure, industry and insurance. Written by a team of seasoned analysts, based on the ground for six months, the critically acclaimed series of economic, political and business reports have become the leading source of intelligence on the rapidly developing countries in the regions they cover. OBG's online economic briefings provide up-to-date in-depth analysis on important issues for thousands of subscribers worldwide.

OBG's consultancy arm offers tailor-made market intelligence and advice to firms currently operating in these markets and those looking to enter them.

*Andrew MacDowall, Oxford Business Group analyst


    Commenting on www.vagabond.bg

    Vagabond Media Ltd requires you to submit a valid email to comment on www.vagabond.bg to secure that you are not a bot or a spammer. Learn more on how the company manages your personal information on our Privacy Policy. By filling the comment form you declare that you will not use www.vagabond.bg for the purpose of violating the laws of the Republic of Bulgaria. When commenting on www.vagabond.bg please observe some simple rules. You must avoid sexually explicit language and racist, vulgar, religiously intolerant or obscene comments aiming to insult Vagabond Media Ltd, other companies, countries, nationalities, confessions or authors of postings and/or other comments. Do not post spam. Write in English. Unsolicited commercial messages, obscene postings and personal attacks will be removed without notice. The comments will be moderated and may take some time to appear on www.vagabond.bg.

Add new comment

The content of this field is kept private and will not be shown publicly.

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.

Discover More

Six months after the Covid-19 pandemic forced the world into lockdowns and uncertainties, a fuller picture of its effect on the world economy is beginning to emerge. Bulgaria fared not too bad, according to recent statistical data.

Nowhere is the abyss between what Boyko Borisov's GERB says it is doing and what it in fact does so obvious than in the economy of what firmly remains the EU's poorest state.

From bad to worse? According to a poll by Alpha Research published at the end of 2011, the majority of Bulgarians consider 2011 to have been "the worst" since the economic collapse of 1997.

In the third quarter of 2010 the average monthly income of an adult member of a family in Bulgaria decreased by 2.2 percent on a year earlier. At the moment it is 932 leva, or 466 euros, according to the National Statistical Institute.

The crisis was already a fact in Bulgaria at the beginning of 2009, but the owner of an accountancy firm in Gorna Oryahovitsa would deny it even more vehemently than then Prime Minister Sergey Stanishev.
Rays of hope have started to peep through the cloud-covered economic horizon – even in the new EU member states. Poland has managed to avoid going into recession.

At first, they stopped buying. Then it got worse - they started selling. Yes, it seems the British have deserted the Bulgarian property market and the Bulgarians are taking it very personally.
"The Bulgarian economy is stable." The words former Finance Minister Plamen Oresharski uttered in October 2008 seem more than just a little out of place a year later.

While last autumn the prevailing opinion of people in this country was that the economic crisis did not have a direct effect on them, their view is now completely different.

The commercial real estate market in Bulgaria is at a crossroads.
The "monster munch," as Londoners call the current credit crunch, in my view is running out steam. Everyone is growing tired of the pundits.
According to a saying very popular among Bulgarians in the past, "In his life, a man must do three things: raise a child, plant a tree and build a house for his family." Nowadays this way of thinking no longer reflects the urban lifestyle – the current rati