IMF wants Bulgarian central bank to tighten screw on consumer loans _x000d_

13.10.2005 Source: Dnevnik

Despite the deterrent measures that have been implemented, consumer lending growth remains high, said Hans Flickenschild, the IMF mission leader for Bulgaria, upon his arrival here on Wednesday. The fund will discuss with the Bulgarian National Bank (BNB) the additional measures that could betaken, said Flickenschild. The consumer credit growth is deteriorating Bulgaria's c/a and trade deficits as it fuels the purchase of imported goods, is the opinion of the IMF experts. The fund has revised its projection for Bulgaria's year-end c/a deficit from 7.6% to 10% of GDP. Business loans have increased by 25% or 2.1 bln levs in the past 12 months, shows BNB data from late September. For its part, retail lending is up by 65% or 2.4 bln levs. The anti-lending measures of the central bank fell short of their target in regard to small loans. And this is evident from the recent dynamics of the business and retail segments. Only 43 mln levs (up 0.4%) in corporate loans have been added since late May while household credits rose by 12% or 675 mln levs in the past 4 months.