Revised data more than doubles Bulgaria’s 2014 budget gap

By bne IntelliNews October 22, 2015

The collapse of Corporate Commercial Bank (Corpbank) last year and the subsequent payout of insured deposits by the Bulgarian Deposit Insurance Fund (BDIF) has resulted in a huge budget defict for Bulgaria, according to revised data, announced on October 21. However, the government debt level remained largely unchanged.

Following an analysis by Eurostat in cooperation with the Bulgarian National Statistics Institute, BDIF has now been reclassified inside the general government, leading to an increase in the 2014 budget shortfall to 5.8% of GDP from previously estimated 2.8%, the two institutions said in separate statements. Thus, Bulgaria, which has long been praised for its macroeconomic prudency, racked up the fourth largest budget gap in the EU after Cyprus (8.9%), Portugal (7.2%), and Spain (5.9%).

In nominal terms, the 2014 deficit was revised up by BGN2.6bn (€1.3bn) to BGN4.8bn. BDIF has paid out some BGN3.66bn to guaranteed depositors in the country's once-fourth-largest-bank since December 4, 2014.

Bulgaria’s finance ministry said it does not expect the launch of an excessive deficit procedure against Bulgaria, because BDIF’s reclassification will not affect the deficit targets for the coming years. Bulgaria aims to trim the shortfall to around 2% of GDP next year from a projected 3% this year.

Meanwhile, the revised estimates reduced Bulgaria's government debt by BGN130mn to BGN22.56bn at end-2014. The debt-to-GDP ratio was thus 27%, significantly up from 18% at end-2013, but still one of the lowest in the EU. As at end-August, Bulgaria’s government debt was equal to 28.4% of the projected 2015 GDP, according to finance ministry data.

Related Articles

Speculation over a second downgrade grows as S&P drops outlook on Polish economy

Speculation that Poland could suffer a second downgrade of its sovereign rating at the end of the week intensified on January 10, as Standard & Poor’s lowered its estimates on economic growth. ... ... more

Head of Belarus' largest bank dismissed amidst corruption scandal

Sergei Pisarik has been dismissed from his post of chairman of the board at the largest bank in Belarus, state-owned Belarusbank, the lender's media office reported on December 21. ... more

Privat investigations: PrivatBank lending practices threaten Ukraine’s financial stability

The problems at PrivatBank, co-owned by oligarchs Igor Kolomoisky and Hennady Boholyubov, have forced the Ukrainian government to nationalise the country’s largest commercial bank, putting an ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss