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Skip Navigation LinksHome :: Markets/asset classes :: Emerging Markets :: Central and Eastern Europe :: General budget surplus widens to 6.5% of GDP in Jan-Jul.

Tuesday, September 2, 2008

General budget surplus widens to 6.5% of GDP in Jan-Jul.





General budget surplus widens to 6.5% of GDP in Jan-Jul. The general budget surplus widened by 74.4% y/y to BGN 4.22bn (EUR 2.16bn) in Jan-Jul, data of the finance ministry reveals. The rate of expansion remained roughly flat in the last three months but slowed from more than 100% in Jan-Apr. The surplus accounts for 6.5% of the revised full-year GDP projection as compared to 5.8% of GDP a month earlier. EU advance payments under structural and agricultural funds amounted to BGN 512.6mn or 0.79% of GDP. Budget revenues continued to expand at a rate above 20% (24.4% y/y in Jan-Jul) and reached 60.5% of the full-year projection. Budget expenditures rose by 13.1% y/y during the period. The government is meanwhile planning one-off expenditure boosts towards the end of the year that will cut the fiscal surplus and raise the incomes pensioners and civil servants ahead of the regular general elections in Q3 next year. The end-year spree however may cause another demand-driven rebound in inflation and imports in violation of the set policy targets for taming consumer prices and CA imbalances. Last month, the ruling bloc unveiled plans to allocate higher-than-projected transfers this year to four priority areas: pensions, national security schemes, infrastructure projects, and municipalities.







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