Sun, Nov 22 2009

Balance of payments deficit - the new tradition in Bulgaria

Wed, Jul 15 2009 11:42 CET byDnevnik.bg 750 Views
Balance of payments deficit - the new tradition in Bulgaria

Georgi Angelov of the Open Society Institute.

Photo: Krassimir Yuskeseliev

Bulgaria’s balance of payments registered another deficit in May 2009, at 32.7 million euro, swinging from a modest surplus in the previous month, according to central Bulgarian National Bank (BNB) statistics.
 
The total deficit for January to May added up to 1.034 billion euro against a surplus of 874 million leva for the corresponding period of last year as capital and financial account surpluses could not make up for the current account gap.
 
Economists blamed the deficit on government spending, commenting that the latest figures confirm statements that the state budget is in the red coupled with a deficit in the balance of payments.
 
Georgi Angelov of the Open Society Institute said that private companies had already started to adjust to the new conditions, but the government had been continuing to spend more than it received by tapping into the fiscal reserve, thus nibbling at the government deposit at BNB and currency reserves.
 
The widest gap in the balance of payments was registered in January, when it expanded to a yawning 734 million euro as portfolio investments ebbed away and banks paid debts to foreign creditors, mostly their own headquarters.
 
The economic crisis and the weak economic activity have combined to bring the current account deficit to a formidable 1.97 billion euro from January to May, which is 44.725 lower than a year before.
 
Source: Dnevnik.bg
 
 

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