The paper discusses the interrelationships between payments system reform and monetary policy implementation in selected countries in Central and Eastern Europe. The reforms in the payments system are viewed as closely interrelated with the development of money and foreign exchange markets and...

As the countries of Eastern and Central Europe transform their economies from centrally–planned to market–oriented, the question of the role that the governments should play in mobilizing savings to ensure a high growth rate must be addressed. This paper argues that the issue of a good...

This paper examines Bulgaria’s 2004 Article IV Consultation and Ex Post Assessment of Longer-Term Program Engagement. Foreign direct investment inflows have been strong, reserves are rising, and competitiveness appears broadly adequate. Fiscal policy has been tightened in 2003, as the...

This paper discusses key findings of the Fourth Review Under the Stand-By Arrangement for Bulgaria. Performance in 2006 was broadly satisfactory, although structural reform implementation was weaker than expected. Notably, the government postponed until mid-2007 the launching of the electronic...

The staff report for the Second Review Under the Stand-By Arrangement and Requests for Waiver of Performance Criteria highlights Bulgaria’s economic growth, fiscal policy, and reforms. The economic program for 2006 relies on fiscal and credit restraint to rein in demand and strengthen the...

This paper discusses Bulgaria’s prospects for converging to the living standards of the more advanced members of the European Union (EU). The unfavorable economic environment of the early 1990s and the economic crisis in 1996–97 hurt Bulgaria’s output, employment, and investment. Following...

This Selected Issues paper for Bulgaria highlights that the rapid credit expansion has not raised significant financial stability issues, but has been a key factor in the sharp weakening of the external current account. Although the deficit has been mostly financed by foreign direct investment...

The current account deficit in Bulgaria, which doubled in 2005 to 11.8 percent of GDP, deteriorated further to 14.6 percent of GDP during the first four months of 2006. The current account deficit continues to be substantially financed by foreign direct investment (FDI) flows. Fiscal policy has...

Bulgaria's macroeconomic performance in the face of the prolonged slowdown in the EU has been impressive, but risks have intensified. The response of fiscal policy to these risks has been adequate. Plans to increase reliance on state enterprises to carry out public sector activities are...

Bulgaria’s request for a 25-month precautionary Stand-By Arrangement (SBA) in an amount of SDR 100 million or 15.62 percent of quota is discussed. The SBA-supported program seeks to reduce increased external vulnerability and to achieve sustainable high growth through a tighter fiscal policy...