A team of International Monetary Fund (IMF) experts concluded on September 21 a review of Bulgaria's economy, urging the Cabinet of Prime Minister Boiko Borissov to maintain tight reigns on spending.

The IMF team, headed by Bas Bakker, did not rule out a balanced Budget for the year, but said that it expected an 0.5 per cent deficit, Reuters said. "Balancing the budget will be challenging. It will depend on spending discipline," Bakker was quoted as saying.

Lavish spending over the last year of the Socialist-led Sergei Stanishev cabinet, ousted at the July 5 general elections, has been widely blamed in Bulgaria for the Budget deficit, the first after more than a decade of surpluses. Budget deficits are seen as the main threat to the stability of Bulgaria's currency board and the lev's peg to the euro.
"On the revenue side, there are risks that the gains from increased tax compliance may fall short of expectations, while on the expenditure side the envisaged cuts will require strong spending discipline," Bakker was quoted as saying.


The IMF expects Bulgaria's economy to shrink by 6.5 per cent this year and 2.5 per cent in 2010. Should the recession deepen, a higher Budget deficit was to be expected, he said.


IMF's mission visited Sofia on September 10-21 at the request of the new Government and Finance Minister Simeon Dyankov for a review of the Cabinet's economic stimulus plans. No negotiations concerning a possible bailout package were held during the visit, the IMF said.