The Economist Intelligence Unit /EIU/ revised its forecast for private and public consumption, imports and the budget deficit in 2002 according to the latest EIU report on Bulgaria because of higher spending plans by the incoming government.
Alterations to global forecast for oil prices and the euro/dollar rate have led EIU to change its forecast for the current-account deficit in 2001 and 2002 to more than 5% of GDP in both years. The forecast for other variables, including real GDP growth, remains broadly unchanged. The National Movement Simeon II /NMS/ aims to make up for higher expenditure and to pursue a zero deficit principle by widening the tax base, with particular focus on the customs administration. `However, reform of customs will take time and will mean tackling some powerful vested interests, therefore we expect pressure on the budget deficit to be upwards. Since budget performance was better than expected in the first six months of this year, we have left our forecast for 2001 unchanged at 1.5% of GDP`, EIU said.