Bulgaria expects to have a fiscal surplus equal to 1.3% of gross domestic product in the first half of the year, compared with a surplus of 2.7% over the same period a year ago, the finance ministry said on Tuesday.
The ministry, said it sees the coronavirus crisis cutting the fiscal surplus by 1.7 billion levs ($977.80 million) on an annual basis through June. It expects to end the year with a fiscal deficit of 3% of GDP.
So far the country has recorded a budget surplus of 1.3 billion levs, or 1.1% of GDP, in the first five months of the year, it said.
Government revenues were 17.6 billion levs at the end of May, down 1.1 billion levs from the same period in 2019. Spending was 16.3 billion levs, up from 15.7 billion a year ago, mainly due to an increase in public pensions and other social spending, the finance ministry said.
Fiscal reserves, held under a currency regime pegging the lev to the euro, stood at 10.2 billion levs at the end of May.
The government expects the coronavirus crisis to shrink the country’s small and open economy by 3% this year. The European Commission is less optimistic and sees Bulgaria’s economic output down by 7.2% in 2020.