13.01.2012

The current issue of recent economic developments brief brings focus on latest GG deficit data, which confirmed Bulgarian government achievement in ensuring timely correction of the 2011 budget deficit. According to flash estimates the latter 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 Program of the Republic of Bulgaria. 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.

Despite strong headwinds in Europe and slowing global activity, short-term business statistics remain roughly stable with decelerating inflation, double-digit export growth and further productivity gains reported. 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.

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