Bulgaria capped its future budget deficits at 2 percent of gross domestic product to ensure that the next government remains fiscally prudent.
The Public Finances Law, approved by Parliament today, will take effect with the 2014 budget, the Finance Ministry in Sofia said in an e-mailed statement. This year’s deficit target is 1.3 percent of GDP, unchanged from last year. Prime Minister Boyko Borissov’s term ends in July, when general elections will be held.
“The law strengthens coordination between the legislative, executive and the judiciary powers with the municipalities to ensure spending restrictions are observed,” Deputy Finance Minister Vladislav Goranov told reporters in Sofia today.
Unlike regional peers, Bulgaria weathered the global economic crisis without borrowing abroad. The economy of the European Union’s poorest country by per-capita output expanded 0.5 percent from a year earlier in the three months through September, the same as in the previous two quarters. The government estimates GDP will increase 1.2 percent this year.