Nouriel Roubini Warns High Growth Crucial for Bulgaria

Bulgaria's mediocre growth is far from sufficient and may trigger new problems, such as an increase in non-performing loans, Nouriel Roubini, the economist dubbed "Dr Doom", warned in Sofia.

At a forum in Sofia on February 26, Roubini, who runs a New York-based consultancy, delivered a speech entitled "Growth opportunities for a small economy in the global world".

That was the first ever visit to Bulgaria by the economist dubbed "Dr Doom" for predicting the 2008 global crisis.

The event took place at Sheraton hotel, Sofia and was organized by pension assurance company Doverie and with the media partnership of Capital weekly and Bloomberg.

According to Roubini all important challenges that Bulgaria faces depend on the recovery of strong economic growth.

"Good macroeconomic framework, low inflation and deficit helped the country, but the old growth model does not work any more and a new one is needed," said the economist.

According to him, this new model can be found in investments in the private sector, structural reforms through "productive" investments, including public-private partnerships.

Bulgaria was too strict with austerity as energy prices soared, driving angry voters to the streets and bringing down the Cabinet, Roubini said in an interview for Bloomberg agency before event.

"Fiscal austerity is valid and countries should have some fiscal policies. Probably in Bulgaria austerity has been very frontloaded."

"The government collapsed because of austerity and other concerns including high energy prices that affect the purchasing power of the household sector," Roubini said.

"There is also some element of corruption that is systemic and people are frustrated with it."

"What is missing in Bulgaria and also other parts of central and eastern Europe is economic growth," he said. "There have been massive job losses there's been a rise in the unemployment rate, growth is mediocre."

Popularly known as Dr. Doom (the title of a profile in The New York Times Magazine), Dr. Nouriel Roubini has published numerous policy papers and books on key international macroeconomic issues, and is regularly cited as an authority in the media.

He has been forecasting a serious financial crisis in the US for years, speaking notably before a skeptical IMF about his predictions in 2006.

Ignored for a long time by mainstream economists and policy makers, he now receives invitations to speak before such influential organizations as the U.S. Congress and the Council on Foreign Relations.

Roubini has coauthored a myth shattering book, Crisis Economics: A Crash Course in the Future of Finance, with Stephen Mihm. It reveals the methods Nouriel used to foretell the current crisis before other economists saw it coming.

Dr. Roubini was chosen as number 4 on Foreign Policy's Top 100 Global Thinkers list and was named to Fortune Magazine's list of "10 new gurus you should know".

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