Bulgaria's economic progress inrecent years has been notable. Since 1997, the country hasimplemented a range of structural reforms alongsidesubstantive fiscal and sectoral reforms. Measures haveincluded the introduction of a currency board to stabilizethe lev and more aggressive privatization of large stateowned enterprises. These developments have led to asignificant turnaround from the period of economic crisis in1996-1997, which was marked by a decline in real GrossDomestic Product (GDP) of 18 percent and annual inflation of579 percent in 1997. Growth resumed in 1998 and has beensustained. Bulgaria's current government, which tookoffice in July 2001, has affirmed its commitment to theobjectives of macrostability, including a continuation ofthe currency board and market reforms. Poverty in 2001 hasbecome more concentrated among distinct and identifiablegroups within the population than in previous years. In thisregard, the profile of poverty in Bulgaria has come toresemble poverty patterns in other countries in Central andEastern European countries more closely. The strong linkbetween unemployment and poverty, and the emergence ofchildren and households in rural areas as high poverty riskgroups, as well as ethnic minorities are features of povertycommon to ED accession countries. While the concentration ofpoverty among specific groups indicates that targetinginterventions to address poverty in Bulgaria will be easier,on the other hand, these pockets of chronic poverty are moreresilient and harder to reach than shallower poverty linkedto transient declines in incomes. These developmentshighlight the need for a long term commitment to povertyreduction in Bulgaria which will require continuity inpolicy, as well as on-going monitoring and evaluation.
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