Bulgaria to Have Balanced Budget even if Economy Shrinks by 6,3%

Djankov also said that an agreement with the IMF has not been discussed, because it was not a live question. Photo by BGNES

A balanced budget can be achieved even if the Bulgarian economy shrinks by 6,3% until the end of 2009.

This has been announced Monday by the Finance Minister, Simeon Djankov, as an answer to the presented by a mission of the International Monetary Fund (AMF) report on Bulgaria.

The results of the report have been reported Monday by the head of the IMF mission to Bulgaria, Bas Bakker. The mission has been invited by the new government to help it assess the fiscal situation in 2009 and 2010.

The IMF corrected its forecast for Bulgaria economy shrinking by 7% in 2009. The current assumption is that the economy will go down by 6,5% in 2009, and by 2,5% in 2010. The Bulgarian Finance Ministry foresees a decrease of 6,3% of the gross domestic product (GDP) in 2009, and 2% in 2010.

In Djankov's words the IMF has given a more positive evaluation than expected for both 2009 and 2010. He underlined the Fund's opinion that without the measures taken by the new government, the results would had been much worse (a budget deficit of 3,5% in the end of 2009).

Despite the IMF's advice the lowering of the social security weight to be reconsidered and discussed again, the Bulgarian government will do it, Djankov said. According to him, the reform in the pension system can be done in a long term aspect, but the social security weight will be lowered in 2010.

Djankov also said that an agreement with the IMF has not been discussed, because it was not a live question.

 

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