September 21 (SeeNews) - The International Monetary Fund (IMF) has revised to 6.5% its forecast for Bulgaria’s negative economic growth this year from the 7.0% projected earlier and said it expected a 2.5% contraction in 2010, Sofia-based news agency Focus reported on Monday.
Bulgaria has been hard hit by the global economic crisis and keeping a balanced budget would be challenging and would require fiscal discipline, Focus (www.focus-news.bg) reported, quoting IMF mission head Bas Bakker as telling a news conference in Sofia which marked the end of a 10-day review of the country's fiscal situation.
The earlier economic growth estimate was released in July in the World Economic Outlook report of the global lender.
The government expects Bulgaria's economy to contract by 6.3% this year.
Shortly after taking office on July 27, the cabinet of the centre-right GERB party, invited the IMF to consult it in reviewing its 2009 budget and help it draft the 2010 budget bill.
Finance Minister Simeon Dyankov has repeatedly said the cabinet will target a balanced budget at the end of the year. Some of the measures carried out by the government immediately after coming to power included a 15% spending cut and lay-offs in the state administration staff.
Bulgaria’s economy shrank by 4.2% in the first half of the year, compared to a 7.1% growth a year earlier. In the second quarter alone the economy contracted by 4.9%, compared to 7.1% growth a year earlier.
For a first time since 2002, Bulgaria turned to a consolidated budget deficit of 372.4 million levs ($279 million/190 million euro) at the end of July, compared to a consolidated budget surplus of 4.2 billion levs in the seven-month period a year earlier.
(1 euro = 1.95583 Bulgarian levs)