Economic and financial section > Report of the Commissioner of the League of Nations in Bulgaria > 24th report

— 2
Appendices:
1. Budget:
(a) Results, at June 30th, of the Close of the Financial Year 1931-32 14
(b) Budget Estimates for the Financial Year 1932-33 16
(c) Results, at July 31st, 1932, of the Financial Year 1932-33 ... 17
(d) Treasury Situation 18
(e) Monthly Budgets 18
(/) Statement of “ Funds ” 19
2. Public Debt:
(a) Position at July 31st, 1932 20
(b) Analysis of the New Pensions Scheme 20
3. National Bank of Bulgaria:
Purchases and Sales of Foreign Exchange during the First Seven Months
of 1932 21
4. Economic Situation:
Foreign Trade 22
5. Position of the Special Account of the Refugee Loan at July 31st, 1932. . . 23
6. Position of the Special Account of the 7 y2 % Stabilisation Loan 1928 as at July
31st, 1932 24
INTRODUCTION.
The quarter covered by the present report has shown no improvement in the economic
and financial situation of Bulgaria. On the contrary, in spite of the undeniable but inadequate
efforts made, the difficulties encountered in the daily solution of the budget and transfer problems
are increasing dangerously. The remedies applied will be mere palliatives so long as there is no
thorough reform of the public finances and so long as no general improvement supervenes to
raise the prices of agricultural produce, lower the barriers to international trade and restore to
Bulgaria the power of discharging its foreign debts by means of exports.
The 1931-32 budget closed on June 30th, 1932, with a deficit of 891.4 millions. The deficit
for the previous financial period was 1,284 millions. The execution of these two budgets has
therefore placed the Treasury in a critical position and forced it to draw on all the resources on
which it was able to lay hands one after another, such as Treasury Bonds, profits from seigniorage
and large calls on the initial receipts for 1932-33. The budget for the latter period has been fixed
at figures which make it impossible to anticipate a balance. It is, therefore, essential that the
tangible improvements already effected by the Ministry of Finance should be continued and
extended.
The trade balance for the first half of the current year shows, according to the Statistics
Department, a deficit of 238 millions. As no fresh credits have been received, the balance of
payments for the same period is a minus one and it has only been possible to solve the transfer
problem temporarily by suspending some of the transfers for the external debt and by a wholesale
postponement of the settlement of foreign trade debts.
Payments on account of the external public debt have been made entirely in leva and the
non-transferred portion has been paid into the special account administered by the Adviser attached
to the National Bank. Since August 15th, 1932, a start has been made with the investment of the
balances available in this account in accordance with the conditions laid down in the Financial
Committee’s recommendations. This will ensure the Treasury receiving appreciable support.
There has been a rapid increase in the volume of private debts. There is reason to hope that
this growth will cease as imports decline. These debts, however, form a large outstanding obliga¬
tion, which cannot for the moment be paid off in the ordinary way and which forces the country
to accept or to tolerate such forms of indirect settlement as clearing arrangements or the blocking
of credits. If this procedure became general, it would result in depriving Bulgaria entirely of the
exchange resources necessary for its non-commercial foreign settlements.
I. State Budget.
(a) Results, at June 30th, 1932, of the Close of the ^31-32 Budget.
(See Appendix 1.)
These results, which include those for the separate budget of the railways and harbours,
are as follows:
Millions of leva
Expenditure 7,366.9
Receipts 6,475.5
Deficit
891.4