Spending Cuts, Revenue Hikes Should Dominate Govt’s Agenda-Analyst
Bulgaria’s caretaker cabinet should first and foremost address the issue of unplanned budget deficits, a local economist has said.
According to Kaloyan Staikov from the Institute for Market Economics (IME), in order to rein in budget deficits the caretaker cabinet should in the first place cut inefficient spending rather than slash all kinds of spending by an equal rate, and then estimate potential risks and prepare to cope with them.
Next, the caretaker government should improve collection of budget revenue, Investor.bg quoted Staikov as saying.
The cabinet led by caretaker Prime Minister Georgi Bliznashki should also urgently analyse the state of key sectors of the Bulgarian economy such as energy and transport to assess the financial state of state-owned and municipal companies and calculate the approximate cost of tackling potential risks, Staikov explained.
Mounting pressure for raising social expenditure in the EU’s poorest member state will be a key challenge for the new caretaker Minister of Labor and Social Policy Minister Yordan Hristoskov, a leading expert on social policy issues. According to the IME economist, however, Hristoskov is unlikely to bow to populist pressures to increase social spending in the run-up to the early elections in October.
Earlier this week, political parties in Parliament failed to agree to increase the fiscal deficit to 2.7% and authorize the raising of new debt of up to BGN 3.4 B in 2014.
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