Revised Budget Draft Raises Bulgaria’s Fiscal Gap to 2.0%/GDP

 Bulgaria’s finance ministry proposed raising the projected budget deficit to 2.0% of the country’s gross domestic product (GDP) this year, from 1.3% set in the 2013 budget act, to reflect projected revenue shortfalls and expenditure overruns, it said.

The draft budget act prepared by the finance ministry assumes economic growth of around 1.0% for 2013, down from the initially estimated 1.9%.

The bigger budget gap requires the provision of additional buffer debt financing of up to 1.0 billion levs for the fiscal reserve, which however, will not exceed the public debt limit of 14.6 billion levs set by the 2013 budget, the ministry said in a statement on its website.

The budget adjustments foresee an increase of the fiscal gap by 493.4 million levs ($330 million/252 million euro). The country's budget gap, however, will remain within the European Union's required threshold of 3%.

Revenues from taxes and excise duties are expected to be 555 million levs less than the assumed inflows.

Expenditure needs to be increased by 500 million levs to provide funding for business support and social payments to vulnerable groups.

The government aims to keep the fiscal stability of the country and facilitate the drawing up of the 2014 budget bill, the statement added.