Bulgaria's 2015 Draft Budget Is Meagrer Than in 2010 - Experts

Business » FINANCE | November 28, 2014, Friday // 13:45
Bulgaria: Bulgaria's 2015 Draft Budget Is Meagrer Than in 2010 - Experts Economist Mika Zaykova. Photo: BGNES

The economist Mika Zaykova said that the 2015 draft budget was not only a meagre pizza, but a hole in the pizza box.

Zaykova is referring to the words of Simeon Djankov, the Finance Minister in the first government of Boyko Borisov (2009-2013), who compared the 2010 budget to a small meatless pizza.

Zaykova explained for Darik, that according to simple economic reasoning, stimulating consumption required an increase in the incomes of the poorest in Bulgaria.

According to her, the freezing of the minimum wage at BGN 340 will not bring to any positive results for the economy next year.

Zaykova sees the draft budget for next year as continuing in Dyankov's footsteps.

In her words, the freezing of the minimum wage means that those working for BGN 340 will receive a net income of BGN 266.53, which is only BGN 20 above the poverty line.

This will lead to the increase in the number of the working poor.

The economist added that the biggest concern was that Bulgaria's troubled consumption, which has almost ground to a halt will further sink.

Zaykova asked how one expects from a working poor person to pay his utility bills, to look after one's children and feed them properly.

The position of the syndicates is that the minimum wage should be increased to BGN 400.

According to Menda Stoyanova, chairperson of the Parliament's Budget Committee, such a step presents a steep increase, which is an economic adventure and could lead to firms going bankrupt.

The economist Georgi Stoev commented that what was most worrying about the 2015 draft budget, was the refusal for reforms in the economic policy.

According to Stoev, even the projected 3 % budget deficit is high and should be reached only in extreme cases, while its long-term maintenance was not a reasonable option.

Stoev explained that deficit can be financed in three ways: through spending the accumulated reserve, privatising active for fiscal returns, or emitting a new debt.

He warned that further increase of debt leads to the country becoming more dependent on foreign markets.

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