21.06.2023

“The budget we are developing for 2023 is feasible. It provides a good foundation for the next couple of years, as its estimates are based on extremely realistic parameters – 1.8 % GDP growth, 7.8 % average annual inflation and 3 % deficit”, Minister of Finance Asen Vassilev said at a briefing. He presented the progress in preparing the country's 2023 budget after a meeting with members of the Budget and Finance Committee in the 49th National Assembly.

Assen Vassilev said there were a number of major changes as compared to the budget proposed by the caretaker government. The budget deficit envisaged is BGN 4,582 billion, which is 3 % deficit on an accrual basis and 2.5 % deficit on a cash basis. In the course of the current year, our country is expected to receive a second payment under the Recovery and Resilience Plan.

On the revenue side, the plans are to collect 100 % dividend from the profits of state-owned enterprises and commercial companies with state participation in the capital. This will provide additional revenues of BGN 780 million to the budget. He also announced that he had asked the Public Financial Inspection Agency to check whether the accounting policies, applied by all companies that pay dividends, comply with Bulgarian and international standards. A further increase in budget revenues by BGN 3.526 billion is also envisaged – revenues are to reach BGN 69,321 billion, mainly as a result of an increase in collection by the National Revenue Agency and the Customs Agency. 

There is a decrease in the expenditure part of the budget as a result of fine-tuning and reduction of capital expenditures by BGN 1.851 billion – they will amount to BGN 8.87 billion. Thus, funds are ensured for all European programmes, the payments for which expire this year, as well as for the capital expenditures in relation to which there is a selected contractor or which are being implemented or are at an advanced stage of the contract. There is a reduction of expenditures under item “Maintenance” of the administration, amounting to BGN 1.5 billion.

“Expenditures on pensions and salaries have not been changed. Teachers’ salaries are set to be 125 % of the average salary; funds are provided for increasing the salaries of assistant professors in universities. Funds are provided in the NHIF budget so that all hospitals can reach levels of minimum salaries of BGN 1,500 for nurses and BGN 2,000 for doctors,” the Finance Minister added. The Fund for Disasters will be increased from BGN 70 million to BGN 130 million in view of the additional events that took place. So far, BGN 60 million of it have been used.

The Minister announced that the tax reliefs introduced last year and the previous years for restaurant owners, bread, flour, gyms, books, etc., would be preserved until the end of the year. Only the tax rate for natural gas is restored to 20 %. “My opinion is that it wouldn’t be good to change taxes in the middle of the year. Everything related to additional tax rates should be considered as from 1 January 2024 in order to have predictability for the whole business,” Vassilev pointed out.

Under the plan, debt is projected to remain the same as last year as a percentage of GDP, Assen Vassilev said. “Debt of BGN 3 billion has already been drawn to repay previous debt. The increase in the net debt will be reflected in the amount of deficit”. This budget fully brings us within the parameters set according to the Maastricht criteria, the Minister was firm. The estimates in the budget are made on the basis of a GDP level of BGN 184,486 million. This amount was set by the caretaker government.

The plans are the budget to be submitted to the National Assembly in the first week of July so that it can be approved by 31 July and enter into force on 1 August, Assen Vassilev announced. “Some details are still being clarified with part of the ministries and other first-level spending units,” he added.