However, since the initial rebound and all the way through mid-1999, a series of adverse shocks kept GDP flat and put the external current account deficit on a rising path. Starting in 1998, export and activity suffered from a slowdown in partner countries and weak export prices as a result of the global financial crises. In March-June 1999, the Kosovo conflict blocked transit routes to western Europe, raising transport costs and causing further losses in exports. By all indications, the economy hit the bottom during the Kosovo crisis. Export growth should reach double digits, boosted by a large carry-over from last year and a markedly better external environment than a year ago.
Poverty also remains widespread, especially among pensioners and in less developed regions.
There is a long remaining agenda to meet the criteria for EU accession, the government's key goal. Bulgaria also has some way to go in completing structural reforms to develop a fully competitive market economy. The state-owned sector needs a higher degree of financial discipline. Effective liquidation and bankruptcy procedures are still in the process of being put in place, slowing the exit of unviable enterprises. The emerging private sector also faces many obstacles, including burdensome bureaucracy and red tape, weak governance, and a banking system hesitant to extend credit.