ECONOMY

In Brief

Bulgaria may see budget deficit this year and next SOFIA (Reuters) – Bulgaria is likely to slip into budget deficits this and next year due to recession and the global crisis, the International Monetary Fund (IMF) said yesterday, urging Sofia to vigorously pursue its planned tighter fiscal policy. Bulgaria’s new center-right cabinet of the GERB party, which won July elections, has cut spending by 15 percent and is taking measures to crack down on smuggling and tax evasion to avoid a year-end deficit and put pressure on Bulgaria’s peg to the euro. Sofia targets balanced budgets this year and next. But the IMF, which Sofia invited to review its fiscal plans, said risks remained and forecast a budget deficit of 0.5 percent of GDP this year and a wider gap of 2.0 percent of GDP for 2010. The IMF said a bigger deficit was possible if the economy contracted more than the expected 6.5 percent this year and 2.5 percent next year. «Balancing the budget will be challenging. It will depend on spending discipline,» the IMF’s mission chief Bas Bakker said after concluding a 10-day audit of Bulgaria’s budget plans. «On the revenue side, there are risks that the gains from increased tax compliance may fall short of expectations, while on the expenditure side, the envisaged cuts will require strong spending discipline,» he added. Bakker said that the new European Union member could afford to run small deficits in times of crisis as long as the shortfalls did not come as a result of fiscal loosening. OTE’s IPTV stretches reach to four more cities Greece’s largest telecoms company, OTE, said yesterday its Internet protocol television (IPTV) service now reaches an additional four cities, boosting the number of regions in which it is available to 33. The service was recently introduced in Grevena, Ioannina, Corfu and Preveza and will be available in all major towns countrywide within the year, OTE said in a statement. IPTV is a system providing digital television over a network such as a broadband connection. OTE’s IPTV product was launched in February and operates under the brand name Conn-X TV. Bank securitization The Bank of Cyprus said yesterday it has completed a 689.4-million-euro ($1.01 billion) securitization of leasing receivables in Greece via special purpose vehicle Misthosis Funding Plc, boosting its liquidity. Bank of Cyprus said UBS acted as the arranger, with 363.9 million of the bonds rated Aaa by Moody’s. (Reuters) T-bill auction Romania’s Finance Ministry sold fewer treasury bills than planned, as it rejected bids for notes priced to yield more than 10 percent, the central bank said. The ministry sold 650 million lei ($222 million) of notes due September 22, 2010, less than the 1 billion lei initially planned. (Bloomberg) Turkish bonds Turkish bond yields fell below 9 percent for the first time after the central bank signaled more rate cuts and Moody’s upgraded Turkey’s debt outlook. Benchmark lira-denominated bills dropped as much as 30 basis points to 8.95 percent in Istanbul, the lowest level since ABN Amro Holding NV began tracking the paper in October 2004. Yields were at 9 percent at the close of trading yesterday in Istanbul. (Bloomberg)