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Bulgaria's interim government aims for 2.9% fiscal deficit in 2022

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  • New parliament to decide on 2022 budget draft
  • Bulgaria may end 2021 with small surplus
  • Bulgaria should tap global markets next year-interim finmin

SOFIA, Dec 2 (Reuters) - Bulgaria's interim government plans to propose a 2022 budget draft targeting a fiscal deficit of 2.9% of economic output, the interim finance minister said on Thursday.

Valery Beltchev said the small and open economy is likely to end 2021 with a balanced budget, or even a small surplus, outperforming plans to end the year with a fiscal shortfall of 3.6% of gross domestic product (GDP).

"It is of course only a plan, but I think we can contain the fiscal deficit to 2.9% next year," Beltchev said in a live streaming.

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Bulgaria sees a fiscal surplus of 0.4% of GDP in the first 11 months of the year, helped by better tax collection and revenues as the country recovers from the coronavirus pandemic. read more

The interim finance ministry sees the Balkan country's economy growing by 4% this year and by 4.6% in 2022. It contracted by 4.4% in 2020.

Although Beltchev is not expected to be finance minister once talks on a coalition government are concluded, he said it was the duty of the interim government to propose a budget plan, to be put before parliament in the middle of December. The new deputies can then decide whether to approve it.

"In the end the talks for the new government are not over and we have no right to wait," Beltchev said. "The finance ministry needs to maintain the stability of the state."

Parliament will have its first sitting on Friday following an election last month, which was the country's third parliamentary election this year.

Bulgaria's largest party, the new centrist faction We Continue The Change (PP), is holding talks with three other parties on forming a coalition government and has said it wanted to propose its own 2022 budget draft in January.

PP and its potential coalition partners have discussed a fiscal shortfall of between 3.5% and 4.5% for 2022to cushion the economy from the coronavirus and support the most vulnerable in the European Union's poorest member statefrom high energy prices.

Beltchev said he believed Bulgaria should tap global markets next year to finance any fiscal shortfall and maturing debt. A seven-year, 1.25 billion euro ($1.41 billion) Eurobond matures at the end of March next year.

Bulgaria, one of the least indebted EU member states, plans to put a limit on new debt it can raise next year at up to 12 billion levs ($6.94 billion), Beltchev said.

($1 = 1.7287 leva)

($1 = 0.8835 euros)

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Reporting by Tsvetelia Tsolova; Editing by Clarence Fernandez, Barbara Lewis and Kim Coghill

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