Bulgarian State Plans to Borrow to Offset Deficit 2011

Bulgaria's 2010 state budget, heralded by FinMin Simeon Djankov as EU's best, had to be revised mid-year over highly inadequate revenue. Photo by BGNES.

The draft 2011 State Budget Act prepared by the Bulgarian Cabinet is reported to preview loans amounting to some EUR 2 B and increase national debt from EUR 4,8 B to EUR 7 B.

The GERB cabinet is making this stipulation in an effort to finance its spending next year, according to a report of the Bulgarian daily Sega.

About EUR 1 B of that loan is to be issuing of bonds. The budget deficit for 2011 is also previewed to be EUR 1 B.

The draft budget for next year also previews issuing of new sovereign loan guarantees, especially for problem-plagued Bulgarian State Railways.

EUR 400 M will be borrowed following an agreement with the European Investment Bank.

If making the EUR 7 B mark, the national debt will be about 16% of Bulgaria's GDP. The strategy for debt management in fact does include a raising of this percentage.

At present Bulgaria's national debt is EUR 4.8 B, or 14.3% of GDP. This includes EUR 3.3 B  foreign debt and EUR 1.5 B internal debt.