Банкеръ Weekly



According to Dimitar Kostov the presented fiscal risk matrix in the budget does not give overal evaluation of the risk sources. Comments on the condition of public sector companies are made in the light of the possible repayment of current and overdue liabilities, while the problem should be considered at a much larger scale. According to the National Statistics Institute (NSI) by mid-2000 there were 1,904 state-owned and municipal companies (excluding the agricultural sector) in Bulgaria. 910 of them have reported losses and their liabilities amounted to BGL2,957MN. Officially reported overdue liabilities of public sector to the budget and to the social insurance at that time amounted to BGL374MN, which represents 1.5% of the GDP.

Overdue liabilities to suppliers, creditors, etc., are of a similar scale. These short-term overdue liabilities of the public sector non-financial institutions form a part of the so called quasi-fiscal deficit and as of June 30, 2000, they amounted to BGL1342MN, or 5.2% of GDP.

There are also some other risky factors, which are not provided for in the fiscal risk matrix. This is, for example, the issuance of compensatory notes and bonds. Even in case there are no considerable expenses for covering these liabilities, they will undoubtedly lead to reduction of state assets, while, if sold, they would contribute additionally to the budget.

Another obvious fiscal risk is the unpaid liabilities of the municipalities, which by the end of the year may reach 1% of GDP.

The establishment of a fiscal risk management system will be an important task for the further development of the country budgetary system. Taking into account the influence of various risks in the decision-making process, is the major advantage for their restriction.

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