Bulgarian Economy Sees Smaller 2009 Decline than Expected

Deputy FInance Minister Goranov has announced the Bulgarian economy would decline by less than the forecast 6,3%.

Bulgaria’s economy is going to contract by between 5% and 5,5% in 2009 instead of the previously forecast 6,3%.

This was announced Monday in Parliament by Bulgaria’s Deputy Finance Minister, Vladislav Goranov.

Goranov made it clear the expected drop of 6,3% would not be reached in the fourth quarter of 2009 but he pointed out that this positive fact would not be reflected in the income part of the state budget since the budget had been prepared on the basis of expected growth of 4,7%.

A heated debate sprang up in the Budget Committee of the Parliament when three MPs from the Bulgarian Socialist Party – ex PM Sergey Stanishev, ex-Finance Minister Plamen Oresharski, and ex Budget Committee head Rumen Ovcharov – proposed that the income part of the 2010 draft state budget be increased by BGN 762,5 M. They expect the additional funds to be raised from taxes, VAT, and excise.

Ovcharov said that if Bulgaria’s economy declined by only 5% in 2009, this means the country’s GDP would be over BGN 63,7 B.

The Budget Committee rejected the motion of the Socialists but approved the one of the ruling GERB party MP Desislava Taneva for increasing the income part of the budget with BGN 70 M in order to add more money to the state agriculture fund.

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