March 17, 2020 / 8:52 PM / 12 days ago

Bulgaria already entering into fiscal deficit -prime minister

SOFIA, March 17 (Reuters) - Bulgaria is already entering into a fiscal deficit amid the global crisis triggered by the coronavirus pandemic and increased public spending to contain its spread, Prime Minister Boyko Borissov said on Tuesday.

The Balkan country raised the salaries of medics involved in treating infected patients by 1,000 levs ($563) per month and extended 500 million levs to support affected companies to service loans.

On Tuesday alone, confirmed cases in the European Union country jumped by 30% to 81, and the country sealed off the ski resort of Bansko.

Borissov said his main aim was to protect the small and open economy and carefully manage the state’s finances, discarding what he called populist calls for tax breaks and a freeze on payments of electricity and water bills.

“We are already entering into a budget deficit. From a surplus, we are entering into deficit. If this crisis prolongs...it will be even bigger,” Borissov told reporters.

Bulgaria is targeting a balanced budget this year, after ending 2018 with a fiscal shortfall of 1% of economic output due. The budget registered a fiscal surplus of 0.7% in January.

Bulgaria, one of least indebted EU member states, keeps a fiscal reserve of about 10 billion levs under an arrangement which pegs its lev currency to the euro.

“We have a fiscal reserve. It is very easy for a very short term to spend it,” Borissov said, adding that although Bulgaria can afford to take up new foreign debt he is not considering such an option for now. ($1 = 1.7774 leva) (Reporting by Tsvetelia Tsolova Editing by Leslie Adler)

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