JAMES Roaf, who recently took office as the International Monetary Fund resident representative in Bulgaria, says he has noted discrepancies in the conclusions that may be drawn from data on the country's economic performance, and perceptions among the public about Bulgaria's progress.
Speaking on Monday at a lunch hosted by the American Chamber of Commerce in Bulgaria, Roaf said people should not believe stories of a strong rift between the IMF and the Government.
Of the recently-concluded IMF mission to the country, Roaf said there had been "very good discussions".
While the purpose of the mission had not been to assess progress in the IMF programme, a subject which would be dealt with during a visit in November, Roaf said the mission was very pleased with how the programme was progressing, and that Bulgaria was on track to meet the programme's targets.
Tax revenues in the first half of the year were very strong. A key area of discussion would be fiscal policy for the second half of this year, and for next year.
The strong increase in imports, and widening current account deficit, was raising "certain issues".
The best response under the currency board arrangement would be to have a tight fiscal policy, and not to spend the over-performance in revenue.
Roaf said there were certain issues related to the economy that, in the time since he took office, he had not been able to understand.
What had surprised him was the gap between the macro-economic indicators, and the way people felt things were going.
From the perspective of outsiders, developments in the economy after the crisis of 1997 could be regarded as a major success story.
There had been growth of five percent of GDP for four years, in spite of the worldwide slowdown. Inflation was down, banks were lending more and at lower interest rates, incomes were up, and unemployment and poverty were decreasing.
"Looking from abroad, this is a fantastic performance."
Yet, Roaf said, "instead most of the people I speak to do not see it that way. People do not think things are going well."
He said various explanations had been offered, and he emphasised that while he was recounting them, he did not endorse them.
One theory was that the statistics were wrong, but Roaf said he found it hard to believe that a strong set of macro-economic indicators could be fundamentally incorrect.
Another explanation that had been offered was the economic growth was real, but the gains were being distributed unequally. But he questioned whether growth could be so unequal that none of the less well-off were making any gains.
He said that where he lived, in the Vitosha district, he had seen much construction work going on. Even though such buildings were being constructed for those with more money, there were spin-offs in the fact that people were getting work on such projects.
Another explanation for the discrepancy between data and perceptions was that people's expectations exceeded what it was possible for the Government to deliver.
There was also the possibility of a bias in the media towards emphasising the negative, on the international principle that bad news sells better.
A further explanation being mooted was the "psychology of the Bulgarian population", that Bulgarians were pessimists: "even if they see gains, they don't believe they are real or sustainable".
Roaf noted that Bulgaria's progress was better than some other countries in the region, and yet while it had had 30 per cent growth since 1997, only 18 per cent of the population believed the country was going in the right direction. Such a discrepancy was not unique to Bulgaria, but it was more pronounced than in some other countries in the region.
"My own impression is not pessimistic.
"For the part of the IMF, the continuation of sound macro-economic policies will continue to improve living standards in the country, even if it is a slow and difficult process," Roaf said.
Speaking on Monday at a lunch hosted by the American Chamber of Commerce in Bulgaria, Roaf said people should not believe stories of a strong rift between the IMF and the Government.
Of the recently-concluded IMF mission to the country, Roaf said there had been "very good discussions".
While the purpose of the mission had not been to assess progress in the IMF programme, a subject which would be dealt with during a visit in November, Roaf said the mission was very pleased with how the programme was progressing, and that Bulgaria was on track to meet the programme's targets.
Tax revenues in the first half of the year were very strong. A key area of discussion would be fiscal policy for the second half of this year, and for next year.
The strong increase in imports, and widening current account deficit, was raising "certain issues".
The best response under the currency board arrangement would be to have a tight fiscal policy, and not to spend the over-performance in revenue.
Roaf said there were certain issues related to the economy that, in the time since he took office, he had not been able to understand.
What had surprised him was the gap between the macro-economic indicators, and the way people felt things were going.
From the perspective of outsiders, developments in the economy after the crisis of 1997 could be regarded as a major success story.
There had been growth of five percent of GDP for four years, in spite of the worldwide slowdown. Inflation was down, banks were lending more and at lower interest rates, incomes were up, and unemployment and poverty were decreasing.
"Looking from abroad, this is a fantastic performance."
Yet, Roaf said, "instead most of the people I speak to do not see it that way. People do not think things are going well."
He said various explanations had been offered, and he emphasised that while he was recounting them, he did not endorse them.
One theory was that the statistics were wrong, but Roaf said he found it hard to believe that a strong set of macro-economic indicators could be fundamentally incorrect.
Another explanation that had been offered was the economic growth was real, but the gains were being distributed unequally. But he questioned whether growth could be so unequal that none of the less well-off were making any gains.
He said that where he lived, in the Vitosha district, he had seen much construction work going on. Even though such buildings were being constructed for those with more money, there were spin-offs in the fact that people were getting work on such projects.
Another explanation for the discrepancy between data and perceptions was that people's expectations exceeded what it was possible for the Government to deliver.
There was also the possibility of a bias in the media towards emphasising the negative, on the international principle that bad news sells better.
A further explanation being mooted was the "psychology of the Bulgarian population", that Bulgarians were pessimists: "even if they see gains, they don't believe they are real or sustainable".
Roaf noted that Bulgaria's progress was better than some other countries in the region, and yet while it had had 30 per cent growth since 1997, only 18 per cent of the population believed the country was going in the right direction. Such a discrepancy was not unique to Bulgaria, but it was more pronounced than in some other countries in the region.
"My own impression is not pessimistic.
"For the part of the IMF, the continuation of sound macro-economic policies will continue to improve living standards in the country, even if it is a slow and difficult process," Roaf said.
