11.07.2012

The 2012-2014 Government Debt Management Strategy is developed pursuant to Article 16 of the Government Debt Law. It is based on and compliant with the basic assumptions set forth in the 2012 State Budget of Republic of Bulgaria Law and the 2013 - 2015 macroeconomic framework developed by the Ministry of Finance. The Strategy is also consistent with the Convergence Programme of Republic of Bulgaria for 2012 - 2015. The 2012-2014 Strategy deals with the government debt - domestic and foreign representing the main part of the consolidated government debt reported in accordance with EAS\'95. The Strategy consists of four main parts.

The first one is an overview of the results achieved and objectives attained as set forth in the 2009-2011 Strategy. The changes in the size, structure and government debt expenditure due to the policy implemented during the period are considered while taking into account the level of attainment of the objectives. Detailed information is provided about the government guarantees under loan agreements that are subject to strict monitoring given their importance for government debt and budget sustainability.

The second part describes the macroeconomic environment in Bulgaria and abroad during the past 3-year period, outlines the trends and the key government and budget priorities for the next 3-year period. The risk management section deals with the potential risks related to government debt and provides information enabling their quantification. The manner in which the risk indicators would change with changing the government debt composition is identified. Based on assumptions about exchange and interest rates fluctuations an analysis has been made of debt sensitivity while taking account of their impact on the debt service costs.

The fourth part describes the strategic objectives set by the Government for the forthcoming 3-year period. A short review is made of the measures to be taken to achieve the objectives set for the period, including a description of the main sources of financing that are to be used and their elements.