Bulgaria's consolidated Budget had a surplus of 173 million leva at end-June, outgoing Finance Minister Plamen Oresharski told reporters on July 20.

For the first five months of the year, the surplus was 555.4 million leva, according to the ministry's data, which would mean that in June alone, the deficit was about 382 million leva.

Oresharski did not present a breakdown of revenues and spending, data which will be available at the end of July, during his news conference at which he presented the ministry's achievements during his four-year term as minister.

"We have restructured several units of the Finance Ministry to make the administration more flexible and meet the European Union's requirements for financial control and management systems, we have created a national co-ordination unit [for EU funding] and introduced internal audit controls," Oresharski said.

Asked about a Budget revision, Oresharski said that the new regulations adopted in December 2008 allowed the government to revise the Budget without needing Parliament's approval. He declined to give advice to the incoming cabinet on which sectors should see their spending cut down, but said that the fiscal reserve, which was 8.2 billion leva at end-June, was the primary source to finance a deficit.

On a possible precautionary agreement with the International Monetary Fund, a sensitive point for the outgoing Cabinet, which has repeatedly rejected the need for a deal with the Fund, Oresharski said: "An agreement with the IMF is a question for next year, when the new Budget and the fiscal reserve targets are being discussed."

"I think that the current level of the fiscal reserve is a good buffer in the medium-term, two to three years, if prudent fiscal policies are pursued and no serious Budget deficits of more than three per cent of gross domestic product are allowed."

Oresharski and outgoing Prime Minister Sergei Stanishev have been criticised by employer unions and opposition parties for setting unrealistic targets for economic growth and government spending in the 2008 Budget.

Initially, a Budget surplus of 907.3 million leva in January appeared to vindicate the Cabinet's calculations, but critics were quick to point out that in recent months, tax authorities have been very slow in refunding value-added tax receipts, which boosted the Budget with hundreds of millions of leva, masking the deficit.

According to Simeon Dyankov, the World Bank economist set to succeed Oresharski as finance minister should Boiko Borissov's cabinet be invested by Parliament as expected, the VAT refunds owed by the state to businesses was 700 million leva.

The Budget only posted a surplus in January and April, when one-off tax receipts gave the revenue side a boost, but the June deficit is the highest yet.