Budget Gap to Cause Deficits in Social Payments - FinMin

Interim Finance Minister Rumen Porozhanov is adamant the budget should be overhauled and has vowed to table an update proposal. Photo by BGNES

Bulgaria's Finance Ministry has warned social and healthcare spending will face significant shortages due to the state budget deficit currently estimated at BGN 3 B.

On Saturday the institution announced the 2014 deficit, under the update proposal being drafted by officials, will be 4-4.2 percent, and fresh state debt of about USD 4.5 B will be needed to tackle outstanding problems.

A new loan would include some BGN 700 M worth of liquidity support and additional tranches for the Deposits Insurance Fund (BDIF).

Deflation in 2014 is likely to surpass 1%, and projected GDP growth is 1.5 percent, down from previously expected 1.8 percent.

If approved, the new figures will raise state debt to BGN 22.5 B, or 28.4% of projected GPD of about BGN 81 B.

The current caretaker government is unable to overhaul the budget, since there is no acting Parliament to pass or reject the motion.

Georgi Bliznashki's cabinet, however, has vowed to submit a complete proposal to the next legislature which is to be constituted after the early elections next Sunday, October 5.

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