Bulgaria Government to Ok Mid-Term Fiscal Policy

The document forecasts the contraction of Bulgaria's economy to slow down to 2% next year from a 6.3% shrinking in 2009. File photo

Bulgaria's center-right government is expected to approve on Wednesday a mid-term fiscal policy document, which brings together the country's key macroeconomic forecasts for 2010-2013.

The document forecasts the contraction of Bulgaria's economy to slow down to 2% next year from a 6.3% shrinking in 2009.

The government plans to keep the current tax rates unchanged and cut social security payments by 2.5% from current 31.6%.

Finance Minister Simeon Djankov has proposed that public salaries and pensions are frozen next year, arguing the people's purchasing power will stay unchanged due to the easing of inflation, which expected to fall to 1.8% at year-end.

The proposal drew harsh opposition from the social affairs minister, according to whom freezing the minimum wage at BGN 240 will fuel the grey sector and lead to a decrease in incomes.

The GERB party, which won the July election, decided earlier this month to cut public spending by an additional BGN 1,156 B and improve tax collection to avoid slumping into a budget deficit at the end of the year.

The ruling party has given indication that it is likely to turn the IMF for help, something the previous government has resisted and most economists would applaud.

A final decision is expected to be taken in February, when the budget parameters and the impact of the public spending cuts the party plans to undertake will be clear.

 

 

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!