Moody's Investors Service said it expects Bulgaria’s 2013 budget deficit to be marginally higher than the 1.8% of GDP it projected in January. "The fact that public demonstrations lead to the GERB government’s exit has negative implications for fiscal consolidation," the agency said. "Whichever party comes into power next, it will be mindful of voter opposition to continued austerity and a desire for stimulus spending and increased welfare payments and subsidies. The government's collapse last week is credit negative for the sovereign and its ongoing fiscal consolidation efforts, according to Moody's. “The lack of a fully functioning government creates uncertainty about policy direction until a new government settles in, damaging investor and consumer confidence and undermining the 2013 outlook for an already weak economy,” the agency commented. In Moody's view, there will be no huge shift in Bulgaria’s economic policy agenda as the main parties have all accepted the need to maintain low budget deficits and contain growth in the public debt stock. “However, future fiscal consolidation will now proceed at a slower pace than we had previously expected,” the agency concluded. Bulgaria's cabinet resigned last week following the massive street protests against high electricity bills and low incomes that have swept the country.