Bulgaria In Better Position Than Neighbors - EBRD

Bulgaria is financially more stable than some of its neighbors but its economy would be deeply affected by the global downturn, European Bank for Reconstruction and Development (EBRD) President Thomas Mirow said on Tuesday.

But analysts say years of budget surpluses and hefty fiscal and forex reserves protect Bulgaria in comparison with regional peers.

The EBRD will increase investment in Bulgaria by 25 percent to almost EUR 250 million. Nearly half of the funds will reach local banks to ease access to trade credit as banks are growing more reluctant to lend.

The EBRD will also finance energy and EU funds projects. The resources will be made available to companies that have proved their viability but have been pressed by the financial crisis. They will be supported to increase their productivity, Mirow explained.

However, Bulgaria's reliance on foreign capital places it in a vulnerable position, the International Monetary Fund (IMF) said Tuesday. The IMF suggests that Bulgarian authorities prioritize maintaining confidence in the country's banking system, which it describes as well-capitalized, liquid and highly profitable.