Bulgarian economy expected to contract more than six percent this year

07-29-2009 15:46

Bulgaria's new finance minister Simeon Djankov commented that the Bulgarian economy will shrink by 6.3% this year, considering budgetary spending decreases. After the initial assembly of the new administration, which was inaugurated Monday, Djankov stated: “The most recent estimations by the finance ministry's Agency for Economic Analysis and Forecasting prove that Bulgaria’s economy will contract approximately 6.3% in 2009.”

Cap of 11 %

He also said that the former socialist administration failed to discuss Bulgaria’s budget, based on estimations which forecasted an economic growth of 4.7% for this year. “There is a 11% cap between the budget’s figures and the actual expectations.”

Bulgarian revenues

The new finance minister went on by saying that in the first six months of 2009, Bulgarian revenues in the nation’s central budget also fell 16% in comparison with the original estimations in the budget. “The current circumstances are much more negative than the former administration acknowledged.”

Budget deficit

“The main goal will be to eliminate a $1.8 billion budget deficit by the end of 2009 in order to realize a balanced budget,” which will be carefully discussed by the administration next week. “We will pass the budget as a decision by the administration in order to save time and to accelerate these modifications, instead of evaluating it in parliament”. The financial structure for 2010 will be authorized in September, which could come along with additional budget changes, suggested by the ministry of finance.

Official recession

The Bulgarian economy contracted 5.0% in the initial quarter of 2009, resulting in an official recession, while last year’s final quarter proved a 1.6% shrink. The International Monetary Fund (IMF) predicted that Bulgaria’s economy would decrease by 7.0% this year and 2.5% in 2010, while analysts projected an extended recession.