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Bulgaria: Budget Balance Negative

Published: March 4, 2013; 10:18 · (Vindobona)

The budget balance under the Consolidated Fiscal Programme (CFP) as of end-January 2013 is negative, amounting to BGN 536.5 million.

Bulgaria: Budget Balance Negative / Picture: © Vindobona.org

This is formed by a deficit under the national budget of BGN 456.9 million and under EU funds of BGN 79.5 million. For comparison the budget balance for January 2012 was negative to the amount of BGN 297.8 million, while for January 2011 the reported deficit was BGN 477.3 million.

The negative balance of the consolidated budget is mainly due to the high interest expenditure for the month (BGN 293.4 million), related to government debt service payments in line with the interest calendar. The interest payments in January 2013 are higher also due to the payment of the coupon of the matured Global Bond of 2002. The effects of the higher interest expenditure and the higher contribution of Republic of Bulgaria to the EU budget in January 2013 compared to the same month in 2012 (the contribution is by 45.5 % higher in January 2013) have led to an increase in the overall expenditure under the CFP.

The one-off effects of the changed deadlines for declaration and payment of some taxes should also be taken in mind. Due to amendments to the Corporate Income Tax Law, changed regimes in the taxes on income of physical persons (TIPP) and other legislative changes part of the received so far revenues from corporation taxes and TIPP shift in subsequent periods of the year.

Key performance data under the CFP as of January 2013

At end-January, CFP revenues and grants stand at BGN 1,787.9 million or 5.8% of those planned in the 2013 State Budget Law.

As of end-January tax proceeds, including revenues from social security contributions, total BGN 1,504.7 million, being 84.2 % of all proceeds under the CFP. Revenues from direct taxes are BGN 168.6 million, or 4.1% of those planned for the year. Indirect tax revenues amount to BGN 885.4 million, or 7.2% of those planned in the 2013 State Budget Law, of which VAT revenues - BGN 587.6 million, or 7.5 %; excise duties - BGN 286.0 million, or 6.6 %; custom duties - BGN 11.4 million, or 9.5 %. Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 35.5 million, or 4.1 % of the plans for the year. Revenues from social security and health insurance contributions for January are BGN 415.2 million, or 6.8% of those planned for the year.

Non-tax revenues and grants amount to BGN 283.2 million, or 3.9% of those planned for the year.

The expenditures under the consolidated budget, including the contribution of the Republic of Bulgaria to the EU budget, as of 31.01.2013 amount to BGN 2,324.3 million, or 7.3% of the planned for the year. Compared to January 2012 the expenditures under the consolidated budget are higher by BGN 126.6 million (5.8 %). In structural terms, compared to January 2012 the subsidies for non-financial institutions are lower, while social and health insurance payments, interest expenditure and the contribution to EU general budget are higher. Non-interest current expenditures amount to BGN 1,790.5 million (7.3 % of the planned for the year), capital expenditures (including net increment of state reserve) amount to BGN 150.2 million (2.7 % of the planned for the year), while interest payments - to BGN 293.4 million (33.5 % of the planned for 2013). In January 2013 the interest paid is BGN 240.5 million on external loans and on domestic loans - BGN 52.9 million.

The part of Bulgaria's contribution to the EU budget, as paid as of January 2013 from the central budget, amounts to BGN 90.2 million, which complies with Council Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities' own resources.

Fiscal reserve as of 31.01.2013 amounts to BGN 4.1 billion. The factors influencing the fiscal reserve amount in January 2013 are the negative budget balance for the month and the financing operations - mainly the repayment of the Global Bond with maturity January 2013 to the amount of BGN 1.5 billion and repayment under GS on the domestic market to the amount of BGN 0.1 billion. Together with the interest payments amounting to BGN 0.3 billion the debt service payments for January amount to BGN 2 billion.

Data on consolidated budget implementation as of 31 January 2013 are published in "Statistics" section on the website of the Ministry of Finance. The statistical data are accompanied by an Information Bulletin on the Execution of the Consolidated Budget, which presents a short analysis of the performance of the key budget parameters on a consolidated level and by constituent budgets.

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