According to the pessimistic forecasts of the Centre for Economic Development (CED), Bulgaria's economic growth in 2009 will be between minus 1 and minus 2 per cent, CED Co-Chair Georgi Prohaski told a news conference.

The optimistic scenario envisages minimal economic growth, not more than 1 per cent.

Bulgaria is already in an economic crisis and this is the first serious cyclical economic crisis since the beginning of a market economy in the country, Prohaski said.

According to the other Co-Chair of the CED, Alexander Bozhkov, the fulfillment of the optimistic scenario for economic growth depends on the adequate actions of the business community and the government.

Bozhkov said, however, that the optimistic scenario is merely theoretical and not feasible because of the forthcoming elections.

According to Prohaski, the development of the current account deficit shows that there is no danger of an automatic collapse of the currency board arrangement.

He predicted that this year there will be no worsening of the ratio between the current account deficit, the gross domestic product and foreign investment. It is possible that the current account deficit and foreign direct investment will decrease 50 per cent each. This means that in 2009 foreign investment will hardly drop below 3,000 million euro.

The CED expects annual inflation to stand at 3 per cent. In this way, Prohaski said, Bulgaria could meet one of the criteria for entry into the Eurozone. The expected low inflation is the reason why CED experts do not recommend wage growth this year. In this sense, the government's policy should be directed towards support for business, and not wage growth, Prohaski said.

Source: BTA