Bulgarian Economists Slam Budget Update, Back President

Finance | August 8, 2013, Thursday // 11:12|  views

Petar Ganev, an analyst at Sofia-based think-tank Institute for Market Economy, commented in the morning broadcast of Nova TV channel on Thursday. Photo by BGNES

Bulgarian economists have taken a stand against a controversial revision of the country’s budget for 2013, which parliament approved last month, citing underperformance.

“The government has failed to provide sufficient reasons for revising the budget,” Petar Ganev, analyst at Sofia-based think-tank Institute for Market Economy, commented in the morning broadcast of Nova TV channel on Thursday.

“The government should have focused on how to improve revenues collections or restructure spending. Instead it rushed to update the budget, which is a problem.”

“I have the lingering feeling that something not very honest is going on,” he said.

The budget revision provides for a new loan in the amount of BGN 1 B to be used as a buffer for the fiscal reserve in 2014, when Bulgaria must make new payments on its foreign debt. Other funds will be slated for the overdue money for the business and for social measures.

Economic growth is revised down to 1% from the original figure of 1.9%, while deficit increases by BGN 493 M, accounting for 2% of forecasted GDP.

“It is weird that the cabinet decided to increase the deficit exactly up to 2% of GDP, the maximum local laws allow,” Petar Ganev said.

“I suspect that the cabinet decided to increase the deficit and then started fishing for reasons to defend the move.”

President Rosen Plevneliev imposed on Wednesday a partial veto on the Law on Amending and Supplementing the State Budget Act for 2013, saying the Socialist-led government had not shown enough transparency in its use of public money.

He explained that the package of social measures included in the budget update constituted a very small share of the earmarked expenses.

Plevneliev pointed out that there was insufficient information about how the new debt of BGN 1 B would be spent.

He noted that he failed to see serious plans about policies and reforms in support of competition and economic growth.

Bulgaria’s Socialist-led government slammed President Rosen Plevneliev after he vetoed a budget revision on Wednesday.

“The president has grossly interfered with the executive authorities in yet another one-sided and unbalanced action," Prime Minister Plamen Oresharski said in an official statement. 

It pointed out that the budget revision aims to correct the country’s fiscal policies from th last few years, which hampered economic growth and limited the opportunities for assistance to vulnerable groups in the society.

Oresharski listed once again the reasons that forced his government, under pressure to quit after weeks of protests, to revise this year's budget, saying it thus sets right the misleading forecast for revenues and spending.

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Tags: Bulgarian Socialist Party, budget revision, Rosen Plevneliev, Bulgarian President, veto, Bulgarian government, center-right party, Citizens for European Development of Bulgaria, GERB, Boyko Borisov, Former Prime Minister, Bulgarian Prime Minister, Bulgaria, Bulgarian, economists, budget, revision


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