Sat, Feb 11 2012

Bulgarian Budget deficit widens by 105M leva in August - Finance Minister

Tue, Sep 08 2009 15:35 CET

byAlex Bivol

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Bulgarian Budget deficit widens by 105M leva in August - Finance Minister

Finance Minister Simeon Dyankov

Photo: Мария Съботинова

Bulgaria's Finance Minister Simeon Dyankov said on September 8 that the Budget deficit in August 2009 was 105 million leva. At the end of July, the consolidated Budget deficit was 386 million leva, which would put the eight-month deficit at 491 million leva.

The ministry had drastically cut capital spending, which was glorified money-wasting, Dyankov said. Government spending in January-July was 23 per cent up for the year at 17.1 billion leva, while revenues decreased by 10.8 per cent to 16.6 billion leva, Reuters reported, quoting preliminary data.

For the first seven months of the year, spending was up by 24.3 per cent to 14.7 billion leva, while revenues were down 11.5 per cent to 14.75 billion leva. A further 437 million leva were Bulgaria's contribution to the European Union budget.

"The effect of these cuts on consumption is tertiary. I believe it is much more important to have a balanced Budget for the year and we have already received praise from abroad for what we have done," Dyankov told reporters at a news conference, as quoted by Dnevnik daily.

Increased government spending had a positive impact on the economy only in countries with zero corruption and Bulgaria was clearly not one of them, Dyankov said.

The deficit posted in August was drastically lower than the figure recorded in July, when a monthly deficit of 570 million leva pushed Bulgaria's consolidated Budget in the red for the first time since the introduction of the currency board in 1997.

July was the last month of the tripartite government headed by Socialist leader Sergei Stanishev, criticised by the current Cabinet for what it called irresponsible and unnecessary spending.

To balance out the books, Bulgaria needed 2.5 billion leva until the end of the year, Dyankov said in August. Part of the looming deficit would be covered by a 15 per cent cut in the budgets allocated to state institutions for 2009, which will save 1.16 billion leva on the spending side of the Budget, he said at the time. The rest is expected to come from improving revenue collection.

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