The International Monetary Fund expressed approval of the Cabinet’s consistency in pursuing its economic program in its latest report to IMF President Horst Koehler issued at the beginning of March. The report, which presents Bulgaria’s two-year stand-by agreement with the IMF, also noted the adoption of important laws such as budget 2002, amendments to the energy act and the Privatization Act.

Still the IMF experts warned against the existence of political risk in Bulgaria. The report claims that social tensions in the country escalate as a result of the Cabinet’s failure to realize its pre-election promises for decrease of taxes and increase of social expenses in order to keep the budget balanced.

It also draws attention to the lack of efficient teamwork in the Cabinet, while the ministers themselves have no experience. According to the IMF experts the people gave vent to this impatience in the presidential elections 2001, when the candidate of the Bulgarian Socialist Party won thanks to his support of a relaxed fiscal policy and increased social expenses.

The report also notes the World Bank’s future loan to Bulgaria, under which the country will have to meet certain requirements. Completion of the banks’ privatization, improving the business climate and reforms in the public administration will be some of the requirements.

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