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UPDATE 1-Bulgaria says will miss deficit goal in 2014, sets new target
August 20, 2014 / 1:06 PM / in 3 years

UPDATE 1-Bulgaria says will miss deficit goal in 2014, sets new target

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SOFIA, Aug 20 (Reuters) - Bulgaria has 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.

Finance Minister Rumen 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.

Porozhanov became finance minister in early August as part of a caretaker government - appointed by the president - that will rule Bulgaria until a general election in October.

Bulgaria, the poorest but also one of the least indebted countries in the European Union, reported a ballooning budget deficit in July, due to higher social spending and increased outlays for EU-funded projects.

“There is a risk for Bulgaria to exceed the EU deficit threshold of 3 percent due to unrealistically high revenue provided by the previous government,” Porozhanov told reporters.

“Additional expenses approved since the start of the year amount to 867 million levs ($589.07 million).”

Porozhanov also said Bulgaria’s fiscal reserves stood at 6.6 billion levs ($4.48 billion) at the end of June, up from 5.8 billion levs a month earlier. (1 US dollar = 1.4718 Bulgarian lev) (Reporting by Angel Krasimirov; Editing by Matthias Williams and Susan Fenton)

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