December 31, 2019 / 4:48 PM / a month ago

Bulgaria expects to end 2019 with fiscal shortfall of 1% of GDP

SOFIA (Reuters) - Bulgaria expects to end 2019 with a fiscal deficit of 0.96% of gross domestic product, outperforming its target for a 2.1% shortfall, the finance ministry said on Tuesday.

Sofia was targeting a one-off deficit of 2.1% of GDP mainly due to a $1.26 billion fighter jet deal it signed with the United States, but better tax collection and some spending cuts helped reduce the anticipated shortfall.

Bulgaria, a small and open economy, hopes to join the eurozone’s obligatory two-year “waiting room”, the ERM-2 mechanism, by next April, and it aims to balance its fiscal books in 2020 and keep it that way by 2023.

The finance ministry sees the economy growing 3.6% this year and by 3.3% in 2020.

Bulgaria’s consolidated fiscal program recorded a surplus of 1.3 billion levs ($746 million) or 1.1% of GDP through November, the ministry said.

Government revenues at the end of November were 39.9 billion levs, up 4 billion levs from the same period last year. Spending in the first 11 months was 38.6 billion levs, up 10.9% on the year, finance ministry data showed.

The fiscal reserves, held under a currency regime pegging the lev to the euro, stood at 10.5 billion levs at the end of November.

($1 = 1.7421 leva)

Reporting by Tsvetelia Tsolova; Editing by Gareth Jones

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