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Bulgarian Economy to Shrink 6.3%
Sofia | 30 July 2009 | New Finance Minister Simeon Dyankov says that Bulgaria faces a 6.3 per cent economic downturn this year, as fellow ministers argue that the economy is in worse shape than presented by the previous adminstration.
At its first meeting on Thursday, Prime Minister Boiko Borisov’s cabinet discussed ways to save money through optimising ministries’ spending – including the possibility of achieving this, in part, through staff cuts.
After the meeting it was announced that ministries will look to come up with ways to address the worsening deficit next week.
Speaking at a news conference after the cabinet meeting, Dyankov said that Bulgaria was facing a 16 per cent budget shortfall – a 2.5 billion leva gap (1 to two 2 billion euros) that had to be bridged.
Former prime minister Sergei Stanishev and then-finance minister Plamen Oresharski had factored into their budget projected growth of 4.7 per cent – growth which never occurred.
Dyankov said that consideration was being given to dealing with the deficit by cutting spending while finding additional sources of revenue.
“We need to reduce costs by 2.5 billion euro, not, as previously expected, two billion euro,” Dyankov said.
The Borisov government will keep a close eye on Bulgaria’s economic performance and, if need be, will propose amendments to the budget in autumn.
Despite earlier reports, Borisov’s administration will not target health and social payments. It also appears unlikely to reduce spending on education.
Speaking before the meeting, the deputy prime minister and interior minister, Tsvetan Tsvetanov, said that the Borisov administration intends to scrap a decree, issued in the dying days of the Stanishev government, reducing the salaries of ministers and senior state officials by 15 per cent.
During the election campaign, Borisov’s party, GERB, dismissed the measure as populist, meaningless and ineffective in the face of a serious financial crisis.
Speaking to Bulgarian National Television before the meeting, Foreign Minister Roumyana Zheleva asked about possible staff cuts at her ministry. She said that the first step would be to optimise costs and then speak to staff, “because we cannot repair the image of Bulgaria without people who care”. Source: Balkaninsight
