Cabinet and the Bulgarian National Bank should draw an action plan to curb inflation, Craig Otter, former emerging markets analyser and current editor in the Economist Intelligence Unit, said on December 11.

Otter participated in the seventh business round table with the government of Bulgaria, under the title Making EU membership work for business, which the Economist Intelligence unit (EIU) organised in Sofia on December 11 and 12.

During the news conference prior to the round table, Otter, Dilia Meth, EMEA EIU associate director, and Antony Hasiotis, chief executive director and directors’ council member of Eurobank EFG Bulgaria, spoke about new trends in new markets corporate strategies, the global credit restrictions influence on Bulgaria and they outlined what EU membership means for Bulgaria.

According to Otter, the transition from consumerism to the current investment boom in Bulgaria, coupled with the "incredibly uneven" inflation rates, were major concerns for Bulgarian competitiveness. He said the country would need to attract more external finance.

Before Bulgaria could adopt the euro as its currency, it would need to solve several issues, Otter said. The first one was the high inflation. Cabinet and BNB should prepare an action plan to curb the inflation, Otter said.
Bulgarian inflation rates would have to be in line with EU requirements before the country could adopt the euro.

Otter said that Bulgaria was "extremely attractive for foreign investments," but the country also needed to attract foreign know-how and capital. He said there should be a strong pressure on authorities to find new fields for investments, especially greenfield assets.

Otter's third main concern for Bulgaria was the currency board arrangement and the low productivity. "Bulgaria still has the cheapest labour force in Europe," he said. But the country also had low productivity and should encourage more productive workers. Bulgaria should invest in human capital and capacity building, he said.
In all, Otter said, the currency board arrangement was "an important anchor" for economic stability.

Participants in the round table discussion included Kremikovtzi chief executive director Alexander Todorov, JT International Belarus & Export vice president Konstantin Fyodorov, Am-Cham president for Bulgaria Borislav Boyanov, Italcementi Group Bulgaria general director Alex Kar, AstraZeneca general director Zoya Paunova, Bulgarian Business Leaders Forum president Maria Shishkova and Motorola Bulgaria general director Georgi Georgiev.