GERB decides to rule as a minority government
Overview:
Although Bulgaria is now feeling the effects of the global financial crisis its economy is proving to be relatively resilient, aided by the currency board and a strong track record on fiscal policy. The fiscal position has, however, deteriorated somewhat in the run-in to parliamentary elections as the outgoing government tried, in vain, to check the dramatic advance of Boyko Borisov’s GERB party. Fiscal slippage, though, was not dramatic and can be reversed relatively easily if the new GERB administration seeks to obtain a new IMF agreement as indicated in the pre-election campaign. The economic slowdown may be painful, but it is also helping to reduce the huge external account imbalances that Bulgaria had accumulated during years of hectic, credit-fuelled growth which raised external indebtedness sharply.