So far, Bulgaria has not been affected by the financial crisis, however risks this to happen are high, Open Society Institute Senior Economist Georgi Angelov told a discussion organized by the Institute.

To Increase Economy Flexibility through Structural Changes

Bulgaria's economy has kept and increased the rate of its growth. The highest rate of economic growth was posted in the first half of 2008 in the period of economy recovery after 1989. Bulgaria is ranked third regarding GDP, however it remains the poorest EU member-state, Angelov said.

According to him, the forthcoming months will be very critical for the country. To avoid reducing Bulgaria's credit rating, Angelov recommended the government to support a strong fiscal policy by restricting costs and to implement a careful policy regarding the state sector revenues. According to him, despite the fact that this country is in a pre-election period, when rulers are not keen on making reforms, the flexibility of the economy has to be increased through structural changes. He recommended preservation of the economic stability and the currency board and speeding up preparations for entering the Euro zone.

Budget Surplus - an Important Buffer

Liberal Strategies Centre Programme Director Georgi Ganev said that, unlike in many other countries, there is no reduction or worsening of the credit rating at the background of the global financial crisis.

The Government should keep on supporting the trust in the banking system and in the currency board, he added. According to him there are no dangers for the banking system of this country, however it does not have a full immunity bearing in mind the enormous global crisis. The budget surplus has to be maintained as an important buffer, Ganev recommended. It is reasonable the surplus to be 6 per cent of GDP and not to decrease or increase over this level.

Bulgaria should offer Competitive Advantages for Investors

Industry Watch Managing Partner Luchezar Bogdanov clarified that if there are any negative effects from the global crisis, they would not be a mirror copy of what happened at Wall Street in the United States. In case of a global crisis, not all economies suffer equally, Bogdanov said. If the economic sectors of this country go on offering competitive advantages for investors - to
offer higher profits and opportunities for growth - investment will continue to be attracted. Because of that, it is important the Government to expand the economic freedom and to improve Bulgaria's business environment, Bogdanov recommended.

Source: BTA