Bulgaria is not in any danger of financial crunch, Bulgarian Finance Minister Plamen Oresharski told members of Parliament (MPs) on February 15 2008.

The Government should keep a close watch on developments on international markets because the country was no longer a close-ended economy, he added, as quoted by Dnevnik daily. Now that Bulgaria was integrated into the EU market, external influences were much more tangible and one should not rule out potential liquidity problems, Oresharski said.

Nevertheless, the government's fiscal policy was sound with solid fiscal reserves and a strong surplus. The banking sector was no less stable, he added.

The current account deficit was a serious issue and was caused mainly by the trade deficit, a trend that has been developing for the past decade, Oresharski said. Foreign direct investment flows and the faster growth rates, as well as the swift increase of incomes, have all contributed to widening the current account gap. However, the end-year figure for 2007, based on preliminary data, was 20.5 per cent, in line with the Cabinet's expectations.