THE Finance Ministry changed its forecast of Bulgaria's economic growth from 5.3 to five per cent for this year, based on new macroeconomic expectations.
Forecasts were revised chiefly because the currently record high oil prices in international markets. Gross domestic product (GDP) growth expectations for 2003 were revised as well and reduced from five per cent. So the trend from 2001 and 2002 for exceeding initially expected GDP growth has ended. In 2002 the growth forecast of 4.5 per cent proved conservative and growth reached 4.8 per cent.
The forecast for average inflation rate in 2004 was revised to between five to six per cent, compared to the original forecast of four per cent.
Finance Minister Milen Velchev tried to soothe Bulgarians, promising them that whatever average inflation comes in at, it will be taken into consideration in the next salary increase, which is not expected to be earlier that the beginning of 2005.
According to last autumn's forecast by the International Monetary Fund (IMF), presented in its World Economic Outlook, the inflation rate for 2004 should have been 4.2 per cent. The spring forecasts, however increased significantly to six per cent, so the Government's new calculations match those of the IMF.
Another piece of disturbing news came on May 31, when Bulgarian National Bank (BNB) said that Bulgaria's current account deficit had widened to $587 million in the first quarter of 2004. In the first quarter of 2003, the current account deficit was $477.5 million.
Surging imports, which rose in the first quarter of this year by 15.7 percent year-on-year, are the main cause for the deterioration. The commensurate rise in exports over the same period was just 5.2 per cent, BNB said.
Economists are concerned by the size of the Bulgarian current account deficit particularly when measured as a percentage of GDP. In 2003, the current account deficit hit 8.7 percent of GDP.
A more encouraging report was also released on May 31, in which according to preliminary figures, direct foreign investments in Bulgaria totalled to 294.1 million euro in the first quarter of 2004, which is 1.5 per cent of GDP. The figure represents an increase of 34 million euro or 13.1 per cent up year-on-year. In the period under review the Netherlands topped the list of investors with a share of 32.1 per cent of the total investments, followed by Switzerland with 29.7 per cent and Austria with 13.7 per cent.
Forecasts were revised chiefly because the currently record high oil prices in international markets. Gross domestic product (GDP) growth expectations for 2003 were revised as well and reduced from five per cent. So the trend from 2001 and 2002 for exceeding initially expected GDP growth has ended. In 2002 the growth forecast of 4.5 per cent proved conservative and growth reached 4.8 per cent.
The forecast for average inflation rate in 2004 was revised to between five to six per cent, compared to the original forecast of four per cent.
Finance Minister Milen Velchev tried to soothe Bulgarians, promising them that whatever average inflation comes in at, it will be taken into consideration in the next salary increase, which is not expected to be earlier that the beginning of 2005.
According to last autumn's forecast by the International Monetary Fund (IMF), presented in its World Economic Outlook, the inflation rate for 2004 should have been 4.2 per cent. The spring forecasts, however increased significantly to six per cent, so the Government's new calculations match those of the IMF.
Another piece of disturbing news came on May 31, when Bulgarian National Bank (BNB) said that Bulgaria's current account deficit had widened to $587 million in the first quarter of 2004. In the first quarter of 2003, the current account deficit was $477.5 million.
Surging imports, which rose in the first quarter of this year by 15.7 percent year-on-year, are the main cause for the deterioration. The commensurate rise in exports over the same period was just 5.2 per cent, BNB said.
Economists are concerned by the size of the Bulgarian current account deficit particularly when measured as a percentage of GDP. In 2003, the current account deficit hit 8.7 percent of GDP.
A more encouraging report was also released on May 31, in which according to preliminary figures, direct foreign investments in Bulgaria totalled to 294.1 million euro in the first quarter of 2004, which is 1.5 per cent of GDP. The figure represents an increase of 34 million euro or 13.1 per cent up year-on-year. In the period under review the Netherlands topped the list of investors with a share of 32.1 per cent of the total investments, followed by Switzerland with 29.7 per cent and Austria with 13.7 per cent.
