BGN 3,5 B Bulgaria 2009 Budget Hole - IMF Report

The IMF launched a mission Monday in Bulgaria to collect information on the economic environment in the country. Photo by blog.artvoice.com

BGN 3,5 B of the expected Bulgarian 2009 budget revenue will not be collected over the global financial crisis.

The International Monetary Fund Report (IMF) insists in a report that Bulgarian administration should cut all its expenses by 10% in order to record a small budget surplus, BGNES reported.

The IMF launched a mission Monday in Bulgaria to collect information on the economic environment in the country.

The biggest concern comes from the collecting of value added tax (VAT), because BGN 3 B is expected not to enter the budget. In order to balance the budget, the government must cut its expenses by BGN 1,7 B. That can be done by cutting salary promotions in the budget field, the report suggests.

The IMF expects that the economic growth in Bulgaria for 2009 will around 1 percent, contrary to the government's plans for 4,7%. The global financial crisis will worsen the economic environment and even the expected 3% increase in the gross domestic product (GDP) will fall to 1%, the report says.

The 2009 budget surplus is expected to be less than 1,4% of the GDP or less than BGN 1 B. The government planed a surplus of at least BGN 2,19 B.

The negative effects of the global financial crisis cause the decrease of Bulgarian export, and also decrease of number of foreign tourists coming to our country. The bank sector has already started shrinking, and foreign investments have lowered. The real estate sector has been affected in a negative way which increases the number of bad credits.

Bulgaria's economy may also slowdown, and even a negative growth of the GDP by -3% can be expected.

The IMF though is positive about the Bulgarian government's financial policy, and advices that the currency board be preserved and budget surplus should be aimed.

 

 

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