SOFIA: Bulgaria budget deficit ballooned to 1.15 billion levs ($774.67 million) for January-July as tax revenues fell short and EU funds for some projects were frozen, the acting finance ministry said on Friday.
The deficit, which was up from 168.2 million levs in the same period last year, was equivalent to about 1.44 percent of gross domestic product.
Interim Finance Minister Rumen Porozhanov said on Friday that gross domestic product is expected to amount to less than 80 billion levs this year, compared to 81.6 billion levs set in the state budget.
However, the government kept its economic growth forecast for this year of 2.1 percent.
Last week, Bulgaria set a new deficit target of 3 percent of GDP for this year, nearly double the original goal, which it said was based on unrealistic revenue forecasts made by the previous government.
Porozhanov said the shortfall could be even bigger than the new target of 3 percent, which was revised from the previous government's goal of 1.8 percent of gross domestic product.
Sofia needs to keep fiscal policy tight to protect its currency peg to the euro. Its currency board arrangement means fiscal policy is the main way to influence the economy, rather than interest rates.
Earlier this month, Bulgaria President Rosen Plevneliev dissolved the Balkan country's parliament and appointed an interim government headed by Prime Minister Georgi Bliznashki.
A snap parliamentary vote will be held on Oct. 5. The state budget is planned to be revised once a new parliament is constituted.
Analysts say the country should work to unlock EU reimbursements on some EU-backed programmes that the European Commission has put on hold due to concerns of irregularities in public procurement tenders carried out from 2010 to 2013.
Total fiscal revenues in the first seven months of the year were 16.8 billion levs, a 1.4 percent increase compared to last year, while spending rose 7.2 percent to 18 billion levs, finance ministry data showed.
Fiscal reserves, which Bulgaria needs to support its currency peg, stood at 8.9 billion levs at the end of July.
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