The debate on fiscal policy in Bulgaria focuses on the fiscal impact on households and businesses, or it is conducted through the prism of its impact on public debt, but not on the effect of fiscal policy over inflationary processes in the national economy. And the management of inflationary processes is a leading recommendation of the International Monetary Fund (IMF) to Bulgaria according to the latest report. This was the essence of an exposé by Geoff Gottlieb, IMF Senior Regional Representative for Central, Eastern and South-Eastern Europe, which he delivered during the second annual conference of the Council for Economic Analyses (CEA) under the Council of Ministers on Monday. The two-day scientific symposium is being held at the Rector's Office of the Sofia University.
The macroeconomist focused the audience's attention on the IMF's recommendations to this country, from the point of view of an external observer of the processes in Bulgaria.
He emphasized five areas he identified as priorities. First of all, Gottlieb highlighted the process of managing inflationary pressures in a fixed exchange rate environment. Secondly, the IMF representative raised the need for measures to address growing social and development needs. Thirdly, he pointed to the need for policies that would lead to increased resources in the public sector to ensure its sustainability. Last but not least, Gottlieb stressed the importance of Bulgaria’s taking action to reduce emissions, while at the same time creating a safety net for the most vulnerable in society.
Gottlieb outlined four key recommendations from the IMF to the country's decision-makers: it is critical to avoid stimulative fiscal policy when disinflation is a priority; the growing need for public spending means more public revenue; lower levels of corruption, combined with higher labour market inclusion, are crucial to the convergence process; and finally, the IMF recommends reducing emissions while protecting vulnerable groups in society.
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