Bulgarian Finance Minister Plamen Oresharski echoed the IMF's grim outlook and finally admitted the state budget policy to stem the crisis needs revision. Nevertheless, the budget surplus target remains with the fallback option for a one per cent of GDP surplus coming to the fore and the three per cent projection being abandoned.

Oresharski told US financial experts the Cabinet has a new plan to curtail public spending as the current buffers would not be enough. At the same time, he argued, sticking to a budget deficit would undermine investors' confidence in the stability of the currency board and the Bulgarian economy.

Bulgarian finance minister's new forecast comes after the national revenue agency collected 1.15 billion leva less than planned in the first quarter of 2009 and after IMF announced its dim projection for a 3.5 per cent GDP decline in 2009 and a further one per cent contraction in 2010.

Oresharski's calls for an extra trimming of public spending fell on deaf ears until last week when the IMF mission to Sofia warned Bulgaria may close the year with a budget gap unless it tightens its purse strings further. However, chances that the incumbents will scale back expenditures are getting slimmer with elections due in July.

Bulgarian banking system is stable, profit-making, with high capital adequacy and efficient oversight, Oresharski told financiers in Washington.

However, the consensus among participants at the forum is that the crisis has taken a turn for the worse and governments will need more time to map out new measures and economies will take longer to recover.

Source: Dnevnik.bg