Bulgaria plans zero budget deficit

SOFIA (Reuters) – Bulgaria will aim for a balanced budget, or even a surplus next year, to avoid the risk of economic overheating, Finance Minister Plamen Oresharski said yesterday. The EU-aspirant country should keep its tight fiscal stance next year due to a ballooning current account gap, forecast at 9.2 percent of gross domestic product at the end of 2005, he said on returning from the International Monetary Fund summit. «We discussed (with the IMF) a balanced budget for next year and for the chances of achieving a surplus,» Oresharski told reporters. «The policy of restricting expenditure should be continued.» Fiscal policy is one of the few tools the Balkan country has to control its emerging economy, as a currency board regime introduced in 1997 pegs its lev to the euro and restricts the central bank’s room for policy moves. Bulgaria has pledged to the IMF to end 2005 with 1.0 percent of GDP surplus and limit spending despite devastating floods this year, which incurred damage of around 1.0 billion levs ($614.3 million).