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Recession could lead to increased non-performing loans, warned the directors of the International Monetary Fund (IMF) in its examination of the annual report.

In the press statement released today, highlights the role of the currency board preserve macroeconomic stability. The views of representatives of the mission that the real rate is overestimated, but it is difficult to say by how much. Government has been advised to avoid further deterioration of competitiveness by increasing real wages faster than productivity increases.

The Government was commended for its strict fiscal policies, large foreign exchange reserves, low debt and large fiscal reserves.
However, directors have noted that "large capital inflows from outside contributed to the boom in investment and consumption and has created a large deficit in current account balance. Dependence on foreign capital is a source of uncertainty. Expectations of Directors are for a sharp slowdown in economic growth due to negative trends in the trade partners of Bulgaria and because of the moderate capital inflows. In this context they stressed that the importance of priorities and a major non-budgetary expenditure to achieve the necessary budgetary surpluses in the medium term.

For quick and painless exit from the crisis will be particularly necessary and further structural reforms, the IMF directors noted. They welcomed the recently announced reforms in education and the labor market, aiming to increase productivity and employment. Is commendable progress in reducing administrative barriers to business.