The Joint G24/Consultative Group Meeting for the Republic of Bulgaria was successfully concluded today. Members confirmed their strong support for Bulgaria’s economic reform programme. They pledged a further US$275 million (around Euros 260 million) of balance-of-payments support in 1999, to complement US$440 million (around Euros 415 million) of existing commitments from the World Bank and the IMF. This provides for total pledges of US$715 million (around Euros 675 million) in direct balance-of-payments support to Bulgaria in 1999 alone. These commitments successfully bridge the estimated financing needs as anticipated prior to the possible increased requirements resulting from the Kosovo conflict. The funding will help underpin the IMF-backed three-year macroeconomic programme underway since September 1998.

In addition to balance-of-payments support, many donors plan substantial investment funding in 1999 and beyond. Overall financial support will also be accompanied by increased technical assistance which will help build Bulgaria’s institutional capacity and contribute to the longer-term development goal of EU accession.

The meeting, co-chaired by the European Commission and the World Bank, brought together more than 50 international representatives to discuss developments in Bulgaria and the country’s economic programme. Delegates expressed admiration for the macroeconomic stabilisation – with inflation reduced from hyperinflation rates to single digits, and GDP growth resumed in 1998 – and the structural reforms secured over the last two years. They agreed with Deputy Prime Minister Bozhkov’s assessment that "Bulgaria’s reform programme continues to move ahead, and will be implemented steadfastly through the rest of 1999 and beyond, notwithstanding difficult external conditions".

Deputy Prime Minister Bozhkov referred to the progress under the reform programme, drawing attention to successes in liberalising the economy, pressing forward with privatisation, and focusing on adequate social safety net policies. He noted that this reform progress is designed to put the country firmly on a path of sustainable growth, and it confirms the importance of continued advancement towards EU accession. Minister of Finance Radev also drew attention to the difficult external environment within which Bulgaria is pursuing its reform programme. He pointed out particularly the negative economic impact arising from the Kosovo crisis. In outlining the Government’s proposed responses, he said "We maintain a firm resolve to continue a strong pace of structural reform, and we encourage the international community to enhance its economic partnership for reconstruction and development for Bulgaria and the region as a whole".

Donors welcomed the Bulgarian Government’s focus and prioritisation on social sector development and social protection. Minister of Labour and Social Policy Neikov emphasised the social costs of transition, the progress made so far and the challenges faced: "Economic growth needs to be accompanied by investments in people, to help improve quality of life and protect the vulnerable, we are developing new programmes which international partners can support."

The IMF delegation confirmed the continuing strong progress made by Bulgaria, highlighted the significant impact which the Kosovo crisis is likely to have on the economy, and noted that additional financing may be needed by the Joint G24/Consultative Group as events unfold. The Group welcomed this assessment: some donors explained that they have already increased or accelerated their financial commitments as a result of the crisis, and others noted that efforts are underway to secure additional financing which may be needed. At this stage, the economic impact could not be measured precisely, and the meeting agreed that the assessment of the situation would be kept under careful review for as long as the crisis persists. The Group re-affirmed its willingness to consult again and reassess needs as circumstances develop in the coming months.

22 donor nations were represented at the G-24/World Bank Consultative Group meeting, including 14 EU Member States, plus Canada, Iceland, Japan, Korea, Norway, Switzerland, Turkey and the US. The multilateral organisations included the IMF, the EBRD, the EIB, UNDP, OECD, the Council of Europe and the Nordic Investment Bank.

The World Bank, Mr. Andrew Vorkink, Country Director, Bulgaria and Romania Country Unit and the EU Commission, Ms. Catherine Day, Director Relations with Central Europe jointly chaired the meeting. The Republic of Bulgaria’s Delegation was headed by Deputy Prime Minister Alexander Bozhkov and included Minister of Finance Radev, Minister of Labour and Social Policy Neikov and the Governor of the Bulgarian National Bank.

See Bulgaria page.