Sofia, 23 August 1996 (RFE/RL) - Upon reviewing the pace of economic reform, the chairman of Bulgaria's Nation Bank and the head of an International Monetary Fund (IMF) mission to Bulgaria have agreed that optimism in initial forecasts was too high.
"Some of the goals of the government's program have not been reached," said Ljubomir Filipov, chairman of Bulgaria's National Bank. "We have been bigger optimists than we should."
Filipov made the comment yesterday after a surprise visit to the bank by the head of the IMF mission, Ann Mcguirk.
The IMF approved a 20-month, standby loan of $582 million in July to support the government's reform-and-stabilization program. In a relatively rare move, the IMF granted about 40 percent of the loan within the first few months of the loan agreement.
Under the loan agreement, Bulgaria's government has committed itself to controlling inflation, to stabilizing the currency exchange rate, and to begin shutting down state-owned factories subsidized from the budget.
The government pledged an exchange rate of 150 leva to the dollar -- it is currently more than 200 to the dollar. Inflation is running higher than the projected annual rate of 101 percent. And only five of the more than 60 factories on a government list have been shut down, so far.
Sofia used the first installment of $117 million to pay outstanding foreign debt payments. The next installment is anticipated in September, but is subject to the results of the IMF's ongoing review of the government's performance in the reform program.
Filipov said a major problem is the failure to restore confidence in Bulgaria's ailing banking system, reports the RFE/RL Sofia correspondent. Bulgaria needs between $200 and $300 million to go on with reforms. Filipov urged the government to privatize quickly the national telecommunications company in order to secure these funds.
The IMF's Mcguirk would not comment on the fulfillment of the economic program of the government, she but pointed out that the results of the measures taken so far would be a pre-condition for granting the next installment of the loan.
The IMF mission will stay in Bulgaria for two weeks to review all aspects of the government's reform and stabilization program.