Банкеръ Weekly



The servicing of Bulgaria's foreign liabilities by the year-end does not involve any painful surprises, although projected payments to foreign creditors in 2001 exceed USD1.26BN. After paying due interest and part of the principal on Brady bonds, the aggreagte amount of serviced foreign debt liabilities will exceed USD839MN by end-July. Another USD417MN is due from August till the end of 2001. The will not pose a problem to the Ministry of Finance, having in mind that the State's fiscal reserve totals some USD1.3BN. The question in if the Government will have sufficient money in 2002 as well to service Bulgaria's foreign debt dues, which will exceeds USD1.3BN. The expected deficit of Bulgaria's payment balance current account (including foreign trade and services proceeds and expenses), which is over USD800MN should be added to these expenditures. In order to successfully fulfill its mission, the Government should finds foreign financing of USD 21.BN. However, the Cabinet would not be able to rely on even one third of that amount if it fails to close agreements with the World Bank and the International Monetary Fund.
In case, negotiations with these international financial institutions are successfully completed, Bulgaria will get USD280MN from the World Bank alone. Another USD50MN will be extended by the Japanese Government, which has so far always provided such financing if there is an agreement with the World Bank. More than USD500MN is expected from the European Bank for Reconstruction and Development and the European Investment Bank for projects, which they are ready to finance. These new credits, totalling USD830MN, shall not exceed the liabilities on the principals of recieved loans from abroad, which Bulgaria has to pay in 2002.
The projected subsidy for Bulgaria, which is expected from the Euorpean pre-accession funds amounts to some EUR240MN (USD206MN as per the EUR/USD exchange rate on June 2001). In other words, if the Cabinet of Simeon Saxe-Coburg-Gotha succeeds to sign agreements with the international financial institutions, it could count on external credits fo almost USD1.36BN. The Governments should have to ensure the balance of funds to the size of USD2.1BN from froeign investors. For the entire year 2000 (the data for 2001 are till end-April), their aggregate amount exceeded USD1BN. In its pre-election programme the Nationl Movement Simeion II promised to increase considerably the size of foreign investments. Therefore, the new Government is not supposed to have any difficulties in solving the simple arithmetical problem to attract USD1MN in capital investments from abroad in 2002.

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