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SOFIA, June 30 (Reuters) - Bulgaria expects a fiscal surplus of 1.8 percent of gross domestic product in the first half of the year, compared with a surplus of 3.4 percent in the same period last year, the Finance Ministry said on Friday.
The ministry said tax revenues in the first six months were expected to be higher than in the same period a year, but the surplus would be lower due to a high base last year when the European Union made big payments on EU-backed projects.
The Balkan country ran a budget surplus of 1.7 percent of GDP in the first five months of the year, putting it in line with government projections that the country is likely to end the year with a smaller deficit than the targeted 1.4 percent.
Bulgaria ended 2016 with a surplus of 1.6 percent after initially targeting a deficit of 2.0 percent, mainly due to delays in administering EU-backed projects, which reduced capital spending, while economic growth exceeded forecasts.
Government revenue at the end of May was 14.7 billion levs, down from 14.9 billion a year ago mainly due to a drop in EU aid funds. Spending rose to 13 billion levs from 12 billion a year ago due to higher payments for pensions and social security contributions for public servants.
Fiscal reserves held under a currency regime pegging the lev to the euro stood at 12.8 billion levs at the end of May. (Reporting by Tsvetelia Tsolova; Editing by Alison Williams)