31.01.2018

Based on the monthly data of first-level spending units, the 2017 Consolidated Fiscal Programme (CFP) balance on a cash basis is positive, amounting to BGN 845.2 million, or 0.8% of the projected GDP, and is formed by a national budget surplus of BGN 309.1 million and by a surplus of EU funds of BGN 536.1 million. For comparison, the 2017 State Budget of the Republic of Bulgaria Law estimates a CFP deficit of BGN 1,330.0 million for the year, which means that a nominal improvement in the budget balance by almost BGN 2.2 billion is reported for the year as compared to what is set in the Programme. The national budget balance reports an improvement in structural terms as compared to 2016 mainly due to the growth of tax revenues, including from social security and health insurance contributions, while the balance of EU fund accounts has deteriorated this year due to a baseline effect in 2016 related to the EU grants reimbursed to Bulgaria at the beginning of 2016 for expenditures incurred at the end of 2015 when was the peak of project payments under the previous 2007 – 2013 programming period.

The CFP revenues and grants in 2017 stand at BGN 35,315.2 million, or 99.6% of the annual estimates. In structural terms, tax and social security revenues exceed the estimates for the year by 5.5 per cent, while the performance of non-tax and grant revenues is lower than the annual estimates. Compared to the previous year, tax and non-tax revenues have risen by BGN 2,741.7 million, or by 8.8%, with grant proceeds being lower.

Tax proceeds, including revenues from social security contributions, total BGN 29,581.3 million, which accounts for 105.5% of the revenues planned for the year. An over-performance of the annual estimates is reported for most of the main taxes and social security contributions. Compared to the 2016 data, tax proceeds have risen in nominal terms by 10.0%, or by BGN 2,678.6 million.

Direct tax revenues amount to BGN 5,644.3 million, or 110.8% of the estimates planned for the year, growing by BGN 607.0 million (12.1%) as compared to the same period of the previous year.

Indirect tax revenues amount to BGN 14,532.5 million, which accounts for 103.7% of the annual estimates. Compared to the 2016 data, proceeds in this group have grown by BGN 970.8 million, or by 7.2%. VAT proceeds amount to BGN 9,320.2 million, or 106.1% of those planned. Compared to the previous year, VAT revenues have risen by BGN 767.3 million, or by 9.0%. The amount of non-refunded VAT as of 31 December 2017 is BGN 50.5 million. The excise duty revenues amount to BGN 4,984.5 million, or 98.9% of the annual estimates. Customs duty proceeds amount to BGN 194.3 million, or 117.0% of the estimates for the year.

Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 1,039.4 million, or 104.9% of the annual estimates.

Revenues from social security and health insurance contributions are BGN 8,365.1 million, which accounts for 105.4% of the estimates for the year. Compared to the previous year, the revenues from social security contributions have risen by 14.3%, or by BGN 1,047.3 million, in nominal terms. 

Non-tax revenues amount to BGN 4,213.2 million, which accounts for a performance of 88.5% of the annual estimates.

Grant revenues amount to BGN 1,520.7 million, or 57.5% of those planned for the year.

CFP expenditures, including the contribution of the Republic of Bulgaria to the EU budget for 2017, amount to BGN 34,469.9 million, which accounts for 93.7% of the annual estimates. For comparison, the 2016 CFP expenditures amount to BGN 32,491.4 million. The higher expenditures, as compared to 2016, are mainly due to the greater amount of social security and health insurance payments (a baseline effect of pension expenditures since their increases as from July 2016 and July 2017, the two-step increase in the minimum pension in 2017 (as from July and October)), as well as the higher subsidy expenditures and the higher staff costs, including due to the increase in social security contribution expenditures linked to the higher contribution to the Pensions to Persons Pursuant to Article 69 Fund of the Social Insurance Code by 20 pps as against 2016.

Non-interest expenditures amount to BGN 32,789.6 million, which accounts for 94.9% of the annual estimates. Non-interest current expenditures for 2017 amount to BGN 29,033.7 million, or 102.5% of the estimates for the year, capital expenditures (including net increment of state reserve) amount to BGN 3,755.9 million, or 60.5% of the 2017 State Budget of the Republic Bulgaria Law estimates. Interest payments amount to BGN 792.1 million, or 95.8% of those planned for 2017.

The part of Bulgaria’s contribution to the EU budget, as paid from the central budget in 2017, amounts to BGN 888.2 million, which complies with the existing legislation in the area of EU own resources, i.e. Council Decision 2014/335/EU on the system of own resources of the European Union, Council Regulation (EU, Euratom) No 608/2014 of 26 May 2014 laying down implementing measures for the system of own resources of the European Union and Council Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements, as amended by Council Regulation (EU, Euratom) 2016/804 of 17 May 2016.

The fiscal reserve [1] as of 31/12/2017 is BGN 10.3 billion, including BGN 9.8 billion of fiscal reserve deposits in the BNB and in banks and BGN 0.5 billion of receivables under the EU Funds for certified expenditure, advance payments, etc.

The Consolidated Fiscal Programme implementation data as of 31 December 2017 are published on the website of the Ministry of Finance, in Statistics section.

[1] The scope of the fiscal reserve indicator is in line with §1, item 41 of the Additional Provisions of the Public Finance Law.