DRAFT BUDGET 2012 APPROVED BY THREE COMMITTEES

The 2012 State Budget Bill was approved today by the parliamentary committees on budget and finance, economic policy and healthcare. During the discussion of the draft, Finance Minister Simeon Djankov said that the projected low budget deficit would be the main buffer within it. "The Maastricht criteria set a target for the budget deficit of below 3% of GDP, while we have projected a budget deficit of about 2% of GDP and we believe that the budget will be fulfilled," said Djankov. He added that everything happening in the EU will have an enormous effect on our country. "Recent events in Greece and Italy make us believe that this is not a conservative budget and we should be thinking in a more conservative direction because what is happening around us cannot but affect Bulgaria as well," Djankov commented.

In order to effect Bulgaria's debt payments of BGN 1.85 bn due in 2013, our country will have to issue debt bonds on the domestic and foreign market. According to Djankov, however, our country cannot afford to accumulate new debt. 

"The pension reform, which was broadly discussed, will start in 2021 in practice, with an increase in the retirement age. This is one of the issues on which we were criticized by the European Commission," said Djankov. Experts from the Bulgarian Industrial Association demanded an even more radical approach to the reform of the pension system.

The Minister of Finance stated that the allocation of additional funds to Operational Programme Competitiveness, next week, would be one of the upcoming Government's measures aimed at boosting the real sector. On the question which sectors will generate the expected economic growth of 2.9%, given the low tax collection, Djankov said that some BGN 300 mln had been collected in VAT alone, this year. "A growth is foreseen for the next year, although a modest one," he was clear.