Markets News

Bulgaria expects budget surplus through October despite COVID-19

SOFIA, Oct 30 (Reuters) - Bulgaria expects a fiscal surplus of 618 million levs ($374 million), or 0.5% of economic output, in the first ten months of 2020 despite increased spending and lower tax revenues because of the coronavirus, the finance ministry said on Friday.

The Balkan country plans to end 2020 with a fiscal deficit of 4.4% of GDP, as government spending is expected to soar in the last two months of the year as coronavirus cases surge and ahead of elections due in 2021.

Sofia registered a fiscal surplus of 871 million levs from January to September, or 0.7% of GDP.

The finance ministry sees the Bulgarian economy contracting by 3% this year. The central bank is less optimistic and sees the economic contraction at 5.5% in 2020.

Government revenues are expected to have dropped by 411 million levs to 36.3 billion levs at the end of October compared to the same period a year ago. Spending is seen at 35.7 billion levs at end-October, some 450 million more than a year ago, when the country made a one-off $1.26 billion payment for new F-16 warplanes.

Fiscal reserves, held under a currency regime that pegs the lev to the euro, stood at 13.5 billion levs at the end of September. (Reporting by Tsvetelia Tsolova; Editing by Giles Elgood)