Budget deficit and debt yields

Latest developments show that the 2011 GG deficit will fall to 2% of GDP (in ESA95 terms), well below the 2.5% target embedded in the 2011 State Budget and the 2011-2014. Convergence Programme of the Republic of Bulgaria. General government debt accounted for 16% of GDP.

The government is strongly committed to maintaining strict fiscal discipline and continuing with fiscal consolidation during 2012 in view of achieving a broadly balanced budget in the medium term. The 2012 budget approved by the National Parliament in December 2011 foresees further consolidation measures to a budget deficit of 1.3% and preserving the lowest level of general government debt among the EU countries.

The yield on long-term Bulgarian GS remained stable amid increasing sovereign debt yields of a number of European countries. The outcome of the last GS sale auction for 2011 confirmed Bulgaria’s status of a predictable debt issuer. The positive trends in government debt management allow maintaining an optimal price of state financing, contributing to the reduction in the government debt servicing costs - a prerequisite for preserving the low tax burden in the long run.

Source: Ministry of Finance