Bulgaria Fin Min: "Moderately Optimistic" on No Need For IMF

Business » FINANCE | June 12, 2009, Friday // 16:29
Bulgaria: Bulgaria Fin Min: "Moderately Optimistic" on No Need For IMF Plamen Oresharski said speculation about a possible devaluation in Latvia, which pegs its lat to the euro via a currency board, should not pose a "direct threat" to Bulgaria. Photo by BGNES

Bulgaria doesn't need to turn to the International Monetary Fund for emergency funding, Finance Minister Plamen Oresharski told Dow Jones Newswires in an interview.

The minister said he is "moderately optimistic" Bulgaria will be able to cope without a loan from the IMF.

He added that the government has debated the merits of turning to the IMF and the cabinet's view could change if the economic outlook worsens.

Bulgaria's gross domestic product contracted by 3.5% in the first quarter from a year earlier, sharply down from last year's 7% expansion. The slowdown has raised concern about Bulgaria's reliance on funds from abroad.

Bulgaria's current account deficit was more than 24% of GDP last year. It has narrowed by around half so far this year due to plummeting imports.

But neighboring emerging-market countries have experienced sharper declines. Turkey even posted a surplus in April.

Oresharski said speculation about a possible devaluation in Latvia, which pegs its lat to the euro via a currency board, should not pose a "direct threat" to Bulgaria, which pegs the leva to the euro via a similar arrangement.

"We haven't spent even a penny of taxpayers' money to stabilize the currency" and Bulgaria's central bank has ample foreign-exchange reserves to support the peg, he said.

 

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