July 16, 2014 / 10:20 AM / 4 years ago

Bulgaria to widen fiscal deficit to 2.7 pct after bank crisis

SOFIA, July 16 (Reuters) - Bulgaria will widen its fiscal deficit to 2.7 percent of gross domestic product from an earlier target of 1.8 percent in 2014, Finance Minister Petar Chobanov told reporters on Wednesday, as his government grapples with the state rescue of a bank.

Chobanov also said the government could raise up to 3.4 billion levs ($2.35 billion) in new debt to fund the fiscal deficit and support the rescue of Corporate Commercial Bank (Corpbank), which was hit by a run on deposits in June.

He added that there was still no clear political consensus on the terms of the rescue.

“We are proposing to strengthen fiscal buffers to allow for a flexibility in the current political situation and increase the trust in the financial stability,” Chobanov said.

$1 = 1.4452 Bulgarian Levs Reporting by Tsvetelia Tsolova; writing by Matthias Williams Editing by Jeremy Gaunt

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