Bulgaria’s GDP to decline by 3% in the worst case scenario

The latest budgetary changes adopted by the Bulgarian government are based on the worst case scenario for the development of the COVID-19 crisis, this country’s Minister of Finance Vladislav Goranov said. We have developed three different scenarios, but we assume the most negative one, in order to guarantee the functioning of all public systems until the end of 2020. According to the most-negative expectations and forecasts, GDP will decrease with 3% and unemployment will see a 2% increase. 

I continue to believe that conservative planning and good fiscal policy provide the best response options, Minister Goranov contends. Bulgaria may amend the state budget again in September if necessary, Minister Vladislav Goranov added, BNR reported.

The state treasury may lose EUR 1.2 billion from unpaid value added tax, excise duties, corporate tax, social security contributions and taxes. Moreover, the state must finance the three-month extraordinary measure to pay the Bulgarian employers to keep their staff. These are only preliminary estimates, Minister Goranov pointed out and added that it will all depend on how long the restrictions will continue, because all measures influence factors such as end consumption and investments. The uncertainty about the future makes people limit consumption. According to the best case scenario, economic growth in 2020 will amount to 0.7%. According to the intermediate option, there will be zero economic growth this year. All budgetary amendments proposed by the cabinet will be discussed at an extraordinary sitting of the Bulgarian National Assembly.