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Bulgarian Economy: Update

The World Bank has reported that only six EU countries may achieve positive economic growth in 2009. The report went on to say that there was a very high degree of uncertainty but Bulgaria could see the economy grow by up to 2% this year.

The other five countries who may also achieve positive growth are Czech Republic, Poland, Romania, Slovakia and Slovenia. The Bank said that together with the uncertainty, negative prospects were at the fore.

Citibank has reported that they believe the currency board in Bulgaria would hold up as it is sufficiently stable with fiscal and currency reserves and recommended against currency devaluation or adoption of the euro.

GDP in Bulgaria increased 6% for the whole of 2008 but only increased by 3.6% in the fourth quarter of the year, showing a significant slowing. Bulgaria's main vulnerability is the huge current account deficit, running at 22.9% of GDP. On a positive note the country has one of the largest budget surpluses in the EU. Whilst vulnerabilities pose a big risk, positive growth in 2009 is still a possibility.