Bulgaria 2020 deficit lower than expected at 3pc of GDP

SOFIA: Bulgaria is expected to have finished 2020 with a lower than forecast fiscal deficit of 3.6 billion levs ($2.25 billion), Finance Minister Kiril Ananiev said on Friday.

The latest figure equates to 3% of gross domestic product (GDP), down from previous expectations of a 4.4% shortfall, with Ananiev citing government measures to bolster the economy with support for workers and businesses hit hard by the COVID-19 pandemic.

"At the end of the year (2020), instead of registering a deficit of 5.2 billion levs, we will have a deficit of 3.6 billion levs. If there was not a pandemic, we would have had a balanced budget," Ananiev said.

Bulgaria has spent 2.8 billion levs from state coffers to support workers and frontline medics while redirecting about 800 million levs from EU funds to help cushion the impact of the pandemic, the finance ministry said.

The finance ministry says the economy is expected to have contracted 3% in 2020 and is seen rebounding to 2.5% growth in 2021 with a budget deficit target of 3.9%.

Government spending is expected to have reached 47.8 billion levs by the end of December, up from 45.2 billion levs in 2019, mainly because of job-support schemes and bonuses to pensioners.

Revenue, meanwhile, is expected to have increased by 0.1 billion levs to 44.2 billion levs at the end of December.

Financial reserves, held under a currency regime that pegs the lev to the euro, stood at 8.5 billion levs at the end of December, Ananiev said.