Overhaul of Bulgaria's State Budget 'Inevitable' - FinMin

Business | August 21, 2014, Thursday // 07:31| Views: | Comments: 0
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Bulgaria: Overhaul of Bulgaria's State Budget 'Inevitable' - FinMin Rumen Porozhanov. Photo by BGNES

Interim Finance Minister Rumen Porozhanov has voiced concerns that the current account deficit could reach 3 percent in 2014.

Under the State Budget of the Republic of Bulgaria Act the deficit is projected at 1.8% for the year, after the previous Parliament failed to pass an update to the fiscal plan proposed by Plamen Oresharski's cabinet.

The deficit stood at BGN 1.15 B in July and is expected to grow by at lest BGN 355 M, data from the Ministry of Finance shows, a figure slightly beyond the target for the entire 2014.

This a sharp increase compared to July 2013, when it was BGN 168.2 M, or to July 2012, when a surplus of BGN 200.3 was registered.

Porozhanov cited the BGN 900 M gap in the budget's income statement as the most serious issue.

He added that blocked EU funding under various operational programs is having negative repercussions.

"We will try to maintain the deficit up to 3 percent, which conforms to the Maastricht criteria, in order not to enter an excessive deficit procedure," the website Dariknews.bg quoted Porozhanov as saying.

The European Commission launches an Excessive deficit procedure (EDP) against any member state breaching the agreements of the Stability and Growth Pact, under which every EU country has to keep its current account deficit below three percent.

In Porozhanov's words, a new budget act for 2015 should be prepared at an expert level so that the next cabinet, which is due to be formed after a snap poll this autumn, should be able to review it as soon as possible.

He reminded that even if parties fail to quickly to agree on government, the Parliament, which will be formed after the elections, will be able to receive a draft budget bill.

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Tags: Rumen Porozhanov, deficit, excessive deficit procedure, Maastricht criteria, State Budget of the Republic of Bulgaria Act
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