Restraining Credit Growth : The Case of Bulgaria

The study assesses the effects of the measures that the Bulgarian central bank gradually adopted to restrain the credit growth. We answer the question what would have been the financial flows to the non-government sector if there were no measures. We use ARIMA models for forecasting the credit to the private sector. The study indicates several effects from the measures: a reduction of the banks' credit volume, a deterioration of the informative value of the monetary statistics, a sharp increase of the importance of the non-bank credit, a restructuring of the private sector credit, and increased dependence on external financing