Thanks to successful fiscal consolidation and structural reforms, there has been a notable decline of the fiscal deficit in 2016, which should be 2.1 pct of GDP, says NBS Governor Jorgovanka Tabakovic.
“The public debt ratio is expected to drop for the first time since 2008, a year sooner than expected,” Tabakovic said at the presentation of the November inflation report.
Due to exports growing faster than imports, the current account deficit is declining at a higher rate, and its ratio to GDP should drop to 4.1 pct this year, she said.
“This year’s 1.8 mln euro net FDIs, which are 5.2 pct of GDP, will be more than sufficient to cover the current account deficit,” she said.
The reduction of the target inflation rate to 3 pct with plus/minus 1.5 pct point tolerance has been the most important monetary policy decision since the August report, she said.
