Advantages and Disadvantages of Fiscal Discipline in Bulgaria in Times of Crisis

• Autorzy: Vasil S. Petkov
• Języki publikacji: EN

Abstrakty

EN

The global economic crisis of 2008 has posed serious challenges to the Bulgarian economy and was reflected in worsened macroeconomic indicators. The subsequent sovereign debt crisis in Europe further aggravated the situation and blocked its path to recovery. In line with the overall sentiment in the European Union (the EU), Bulgaria made maintaining fiscal stability a priority that it set out to accomplish by following a policy of austerity. The country managed to achieve the desired effect relatively quickly. It became one of the best performers in terms of budget deficit and government debt as a share of GDP (which are among the lowest in the EU). These accomplishments underlie international institutions' greater confidence in Bulgaria, which has led to an increase in its credit rating. Nevertheless, the state has not managed to reap the maximum benefits that this type of policy offers. Fiscal sustainability was accomplished at the expense of economic growth, the slow pace of which was accompanied by impoverishment of the population, high unemployment, restricted consumption, and operational difficulties faced by real-sector companies. These problems fueled doubts about the adequacy of strict budget discipline, especially in times of crisis. They provoked the author to examine in greater depth the benefits and the drawbacks that such a policy ultimately offers to Bulgaria. The results show that the strict fiscal measures have put additional pressure on the already fragile economic growth and have a high social cost as well. All this justifies the need for the government to take on a new course to achieve economic recovery by means of more active state support that would stimulate a pickup in consumption and production activity. (original abstract)

Słowa kluczowe

EN

Fiscal policy; Economic crisis; Economic situation; Case study

PL

Polityka fiskalna; Kryzys gospodarczy; Sytuacja gospodarcza; Studium przypadku

• Czasopismo: Contemporary Economics
• Rocznik: 2014
• Tom: 8
• Numer: nr 1
• Strony: 47--56

Twórcy

autor

Vasil S. Petkov

• University of National and World Economy, Sofia, Bulgaria

Bibliografia

• Bulgarian Chamber of Commerce. (2013). Задължения на предприятията от нефинансовия сектор на икономиката към 31 декември 2011 г. [Debt of Non-financial Corporations by 31 December 2011]. Bulgarian Industrial Association. Union of Bulgarian Business. Retrieved from http://www.bia-bg.com/uploads/files/analysis/Zadlajnialost_2011.docx.
• International Monetary Fund. (2013). Greece: Ex Post Evaluation of Exceptional Access under the 2010 Stand-By Arrangement (Country Report No.
• 13/156). Washington, D.C. Retrieved from http:// www.imf.org/external/pubs/ft/scr/2013/cr13156.pdf.
• Ministry of Finance of the Republic of Bulgaria. (2011). Обобщена справка за просрочените задължения на централно и местно правителство към 31.12.2011 [Summary of the Central and Local Governments' Overdue Debt by 31 December 2011]. Retrieved from http://www.minfin.bg/bg/statistics/10

Identyfikatory

DOI

10.5709/ce.1897-9254.130