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Bulgaria and the IMF

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Finance & Development
A quarterly magazine of the IMF
June 2007, Volume 44, Number 2

Country Focus


Having joined the European Union (EU) in January 2007, Bulgaria is off to a promising start in its marathon to catch up with the living standards of its new European partners. But the challenge ahead will be to improve productivity.

Since a crisis in 1996-97, progress has been made in closing the large gap in living standards between Bulgaria and its European partners......thanks in large part to sound fiscal policies in support of the country's currency board.In the run-up to EU membership, strong investor confidence led to high investment and large inflows of foreign direct investment (FDI)......but private, external debt has also risen significantly, signaling the need to manage vulnerabilities.The current account deficit mainly reflects growing imports of investment goods and raw materials, holding the promise of boosting future output.But with the population declining and aging problems looming, sustaining growth hinges on higher productivity growth and employment.

Sources: IMF Staff Report No. 07/127, Bulgaria's National Statistical Office, and Eurostat.
1Calculated using purchasing power parity exchange rates.