Given Bulgaria's large external debt and current-account deficit, the Economist Intelligence Unit (EIU) has assumed that the country will require some financial assistance from the IMF and the EU.

Real GDP growth is expected to contract by 3.8% in 2009, following estimated growth of 6% in 2008, mainly because of limited access to external finance and the poor economic outlook for the euro zone, according to EIU latest forecast.

Growth is forecast to rebound modestly, to 0.9%, in 2010.

Inflation will continue to trend down from the high rate in 2008 as domestic demand pressures ease, food inflation drops and world oil prices remain low. Inflation is forecast to average 3.5% in 2009 and 3% in 2010.

Owing to a sharp contraction in domestic demand, the analysts forecast that the current-account deficit will narrow to 13.3% of GDP in 2009 and 9.7% of GDP in 2010, from 24.1% of GDP in 2008.

The Economist's analytical unit commented that the European Union will keep Bulgaria under close scrutiny, continuing to demand judicial reforms, as well as concrete results against corruption and organised crime.

The experts believe that citizens for European Development of Bulgaria (CEDB), the main opposition party, will lead the government after the election due in July 2009.

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