Bulgarian Govt Sector Deficit Reaches 3.2% of GDP 2010

Bulgaria's General Government Sector reported in 2010 a government deficit of BGN 2 269,2 M or 3,2 % of GDP, according to National Statistical Institute's preliminary data.

The main part of the deficit is formed by the Central Government sub-sector, amounting to BGN  1 710.6 M - 2.4% of GDP, followed by the Social Security Funds sub-sector - 806.8 million BGN or 1.1% of GDP. The Local Government sub-sector reported a surplus of BGN 248.3 M or 0.4% of GDP.

The Government Debt of Bulgaria for 2010 is BGN 11 427.8 M or 16.2% of GDP. According to data published by Eurostat Tuesday, it is the second lowest ratio between debt and GDP in the EU 27, after Estonia, which has 6.6%.

Bulgaria is followed by Luxembourg (18.4%), Romania (30.8%), Slovenia (38.0%), Lithuania (38.2%), the Czech Republic (38.5%) and Sweden (39.8%). Fourteen Member States had government debt ratios higher than 60% of GDP in 2010: Greece (142.8%), Italy (119.0%), Belgium (96.8%), Ireland (96.2%), Portugal (93.0%), Germany (83.2%), France (81.7%), Hungary (80.2%), the United Kingdom (80.0%), Austria (72.3%), Malta (68.0%), the Netherlands (62.7%), Cyprus (60.8%) and Spain (60.1%).

In 2010 the largest government deficits in percentage of GDP were recorded in Ireland (-32.4%), Greece (-10.5%), the United Kingdom (-10.4%), Spain (-9.2%), Portugal (-9.1%), Poland (-7.9%), Slovakia (-7.9%), Latvia (-7.7%), Lithuania (-7.1%) and France (-7.0%). The lowest deficits were recorded in Luxembourg (-1.7%), Finland (-2.5%) and Denmark (-2.7%). Estonia (0.1%) registered a slight government surplus in 2010 and Sweden (0.0%) was in balance. In all, 21 Member States recorded an improvement in their government balance relative to GDP in 2010 compared with 2009 and six a worsening.

Bulgaria's deficit under the consolidated fiscal framework on cash basis was BGN 2.8 B in 2010, or 3.9%. The accrual deficit, which is measured according to EU accounting rules, was 3.6%. According to Bulgaria's revised 2010 State Budget Act approved in June, the expected 2010 budget deficit was 4.8%, or BGN 3.691 B.

After in mid June 2010, Bulgaria had to revise its state budget for the first time in 14 years, and even though the January 2011 deficit is substantial, it is still unclear whether it might have to go for a mid-year revision of the 2011 budget.

In early December 2010, the Bulgarian Parliament approved the 2011 state budget, which provides for an economic growth of 3.6%, and a budget deficit of about 2.75% of the GDP, barely below the 3% threshold of the EU Stability and Growth Pact, which is also required for ERM II and euro zone accession.

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