Bulgaria should focus on adopting a budget that will help our country enter the eurozone. This was stated in an exclusive interview with NOVA by the Managing Director of the International Monetary Fund Kristalina Georgieva.
According to her, our country is on the way to solving the problem of higher inflation, with forecasts for it to be 2.6% next year. Currently, the rate is 2.8.
„But if during this period we decide to spend more than we have, and a new hole appears in our criteria for the eurozone - this time a budget deficit, we will indeed postpone our entry. We have postponed it several times already, it is time to tell ourselves that we are tightening up and bringing this work to the end, as happened with Schengen”, Georgieva pointed out.
Regarding the criticism that came from the BNB towards Budget 2025, the IMF Managing Director pointed out: “This does not happen often and in my opinion it happened objectively for one single reason. The European Central Bank works very well with the Bulgarian National Bank, the Commission also works well with the Ministry of Finance. Expectations were built that we would finally overcome the only limitation that we had - inflation, and now we are facing the risk of having a new limitation. That is why the BNB said: “Be careful, let's be more realistic”. Yes, maybe revenues will increase. Let's not forget that we want to increase them with one-off actions, not with a systematic policy to increase revenues”.
According to her, there is an understanding in Europe that more dynamism must be introduced into the European economy if it wants to compete successfully with those who are better off than it is today. “Globally, growth this year has been relatively stable - 3.2%. We are predicting 3.2% for next year. We saw that the American economy performed better than we expected at the beginning of the year. While the European one performed a little worse than our expectations. Why? What is the difference between the United States and Europe? Mainly three things”, Georgieva explained.
And she explained: “First - the United States has energy independence, access to relatively cheaper, abundant energy. Europe, especially after the war in Ukraine, had to adapt to a new energy reality. From the outside, Europeans can be proud of what they have achieved. To shift so quickly from a high dependence on Russia to relative stability in the energy market is no small feat. However, this remains a more complex issue for Europe. Second, the US has capital markets that work much more intensively than those in Europe. The old continent relies more on the banking system, while the US relies more on the capital market. In this capital market in the US, there is easy access to venture capital, which means that innovations there turn into companies, and companies become global leaders very quickly. This does not happen in Europe. We do not have this energy. The third difference is that in the US there is enormous access to human capital. In Europe, the situation is more complicated. We are aging faster and we have not yet decided on the issue of how we will be able to provide a workforce for our economy. The kind that the new economy, which is much more technologically dependent, requires,” is her expert opinion.
„The world is changing very quickly. We see how the transformation of economies lifts some up and brings others down. Europe has enormous potential to maintain its role as a powerful factor in the global economy, if only it solves its problems. I hope that the major economies in Europe will overcome their own limitations and find a way to be leaders in growth in Europe again. Whether this will happen in 2025 - we will see. Is it possible - of course. What I can say from observations around the world - there is a cyclical nature. What changes the trajectory of countries is the determination to deal with the problems as they are, not as we want them to be”, concluded the IMF Managing Director.
Kristalina Georgieva took 13th place in this year's Forbes ranking of the most influential women in the world. “This shows that when you work seriously, you get results and they are recognized. Of course, this is recognition not only for me, but also for the entire IMF team, for the great work we have done for the benefit of the global economy this year,” she shared.