Finance Minister: Bulgaria GDP to Be BGN 63,5 B in 2010, Economy to Shrink 2%

Finance Minister Djankov explaining the tough situation of the government over the 2010 State Budget. Photo by BGNES

Bulgaria’s Finance Minister, Simeon Djankov, stated Sunday the government was struggling in order to achieve a balanced budget for 2010.

After Sunday's working meeting of the government dedicated to the 2010 State Budget, most of the acting Ministers revealed large deficits and alleged abuses committed by their predecessors.

The Finance Minister announced that for the time being the 2010 State Budget estimated Bulgaria’s next year’s GDP at BGN 63,518 B. The economy is expected to shrink by 2% in 2010. This would mean a BGN 6,5 B reduction of the state revenue.

“Budget 2009 has an extremely unrealistic framework. While the state revenue declined by 11% in the first six months of the year, the state expenditures for that period were had been increased by 25%. This led to deficits in all Ministries. Yet, despite this negative heritage we are headed for a balanced new budget, and have a stable fiscal policy,” Djakov declared.

In his words, the 4,7% economic growth envisaged by the former government for 2009 turned into a decline of 6,3%, or a discrepancy of 11%.

Djankov said despite the financial difficulties, the budgets for education, health care, and social policy would not be reduced.

Borisov said most of the Ministries and state agencies were lacking about BGN 300 M each, and reminded that his predecessor Stanishev had denied the existence of a budget deficit.

During Sunday's press conference, Prime Minister Boyko Borisov said there would be no increase of the excise tax on alcohol. Last week, the government officials mentioned that the alcohol excise tax could be increased by 15%.

There will also be no increase in the excise tax on fuel. The only increase on excise tax will be on cigarettes.

Borisov also said his predecessor "Stanishev should be ashamed of what he caused to Bulgaria."