The new centre-right government in Bulgaria is fighting hard to turn the country’s economy round, setting itself some challenging goals in its four year fiscal plan. Running a balanced budget in 2009 and 2010 and adopting the euro by 2013 are amongst the mandates made by the Finance Minister and Deputy Prime Minister, Simeon Djankov.
Acknowledging the difficulties of the tasks ahead, Djankov admitted, “[A balanced budget] will be hard to achieve this year, and the next one will be even harder, but we will succeed.”
The limited power of Bulgaria’s central bank to affect the current economic situation, due to its currency peg to the euro, hasn’t helped. Its fiscal policy is therefore key to the country’s recovery. To avoid the predicted end of year deficit, budgets were substantially cut back earlier this month and measures to boost revenues have been announced. Progress is slow but signs are emerging; the external deficit is shrinking from 26% at the end of 2008 to 11% and inflation is expected to reach 3% by the end of 2009.
Exiting the recession and eurozone entry are key drivers for the controlled fiscal policy. Mid-term fiscal and anti-crisis plans have been sent to the European Union’s Executive Commission laying out concrete steps and timeframes for their implementation.
Source: Balkans.com
