Bulgaria's gross foreign debt dropped 1.8 percent year-on-year in May to 36.5 billion euros ($47 billion), the central bank said on Friday. External debt at the end of May edged down 0.9 percent from a month earlier as a prolonged recession made commercial banks more vigilant on extending credit and decreased borrowing from their foreign parent companies.
Gross external debt stood at 104.9 percent of annual gross domestic product compared to 105.8 percent a month earlier, the preliminary data showed. Gross private debt fell 3 percent on the year to 32.2 billion euros, or 92.5 percent of GDP, mainly due to a drop in banks' foreign debt.
Public and publicly guaranteed external debt jumped 8.8 percent on an annual basis to 4.3 billion euros, or 12.3 percent of GDP mainly due to a World Bank loan extended to Sofia last June. The Balkan country paid 3.3 billion euros to service its gross foreign debt in the first five months of the year, compared to 2.9 billion euros for the same period a year ago.
The centre-right government, which came to power in July last year, said it will rely on its hefty fiscal reserves instead of tapping international markets this year to back public finances after the crisis slashed budget revenues Sofia will target a fiscal deficit of 4.8 percent of GDP in 2010, far bigger than initial estimates despite planned spending cuts.