03.04.2023

Based on the monthly data on cash execution of first-level spending units’ budgets, the Consolidated Fiscal Programme (CFP) budget balance on a cash basis as of February 2023 is negative, amounting to BGN 190.9 million, or 0.1% of the projected GDP, and is formed by a national budget deficit of BGN 300.1 million and by an excess of revenues over expenditures of BGN 109.2 million under the EU funds. For comparison, a surplus of BGN 713.3 million was reported for the first two months of 2022, which means that the budget balance for the period deteriorates by BGN 904.2 million on an annual basis. The faster growth of expenditures is the main factor behind the deterioration of the budget stance compared to the first two months of the previous year. While CFP revenues grow by 18 per cent, expenditures increase by 32.2 per cent, which results in an excess of expenditures over revenues for the period.

Expenditures increase by BGN 2,346.1 million (32.2%) in nominal terms, with the most significant increase being registered for pension expenditures which increase by BGN 715.7 million, as well as subsidy expenditures (increasing by BGN 687.3 million), maintenance costs (increasing by BGN 421.1 million), personnel expenditures (increasing by BGN 383.8 million), etc. The growth of expenditures is due to some pieces of legislation that have become effective, including amendments in the pension field, current programmes compensating electricity consumers, settlement of liabilities under the budget of the Ministry of Regional Development and Public Works, increased salary levels in a number of administrations, etc. 

CFP revenues, grants and donations amount to BGN 9,451.3 million as of February 2023. Proceeds grow by BGN 1,441.9 million, or by 18.0% compared to those reported in February 2022. Tax and non-tax CFP revenues grow by BGN 1,426.6 million in nominal terms, while grant and donation proceeds (mostly EU programme and fund grants) are by BGN 15.3 million more than those reported for the same period of the previous year.

CFP tax proceeds, including revenues from social security contributions, total BGN 7,549.6 million. Tax and social security contribution proceeds grow by BGN 1,230.7 million (19.5%) compared to those reported for the same period of the previous year, forming 79.9% of the overall CFP proceeds for the period. Direct tax revenues amount to BGN 803.4 million, increasing by BGN 94.8 million (13.4%) compared to those reported in February 2022. Indirect tax revenues amount to BGN 3,714.8 million (an increase by BGN 296.4 million, 8.7%, compared to February 2022), with VAT revenues amounting to BGN 2,736.1 million (an increase by 10.7% compared to February 2022), excise duty revenues amounting to BGN 907.3 million (an increase by 4.6% compared to the same period of the previous year) and customs duty revenues amounting to BGN 58.0 million (a decrease by 12.5% compared to those reported in February 2022). VAT revenues in 2023 are affected by the reduction in the central heating and natural gas rate to 9% and the introduction of a 0% rate for bread and flour since the second half of last year, as well as by the increase in the VAT registration threshold to BGN 100 thousand as from 01.01.2023. These measures result in a loss of VAT revenues. Proceeds from other taxes amount to BGN 669.8 million (including BGN 446.1 million of earmarked contributions from electricity producers and traders to the Electricity System Security Fund, in accordance with § 8 of the Transitional and Final Provisions of the Law Implementing the Provisions of the 2022 State Budget of the Republic of Bulgaria Law, the 2022 Public Social Insurance Budget Law and the 2022 NHIF Budget Law), which means that it is the baseline effect in the revenues in 2022 when such earmarked contributions were not collected in the budget that is the reason for the reported growth of BGN 469.7 million in the group of other taxes. Revenues from social security and health insurance contributions are BGN 2,361.7 million, which is an increase by BGN 369.8 million (18.6%) compared to those reported in the same period of 2022.

Non-tax revenues amount to BGN 1,513.3 million (an increase by BGN 195.9 million, or 14.9%, compared to the same period of the 2022) and are formed mostly from state, municipal and legal expense revenues, rents, concession revenues, greenhouse gas emission allowance revenues, etc.

Grant and donation proceeds amount to BGN 388.4 million.

CFP expenditures, including the contribution of the Republic of Bulgaria to the EU budget for February 2023, amount to BGN 9,642.2 million. For comparison, the CFP expenditures as of February 2022 amount to BGN 7,296.1 million.

Non-interest expenditures amount to BGN 9,323.2 million (an increase by BGN 2,359.9 million, or 33.9%, compared to those reported for February 2022). Non-interest current expenditures amount to BGN 8,742.7 million. Capital expenditures (including net increment of state reserve) amount to BGN 575.7 million. The current and capital transfers to other countries amount to BGN 4.7 million. Interest payments amount to BGN 35.1 million (a decrease by BGN 1.8 million, or 4.8% compared to those reported in February 2022).

The part of Bulgaria’s contribution to the EU budget paid from the central budget as of 28.02.2023 amounts to BGN 284.0 million, which complies with the existing legislation in the area of EU own resources.

The fiscal reserve as of 28.02.2023 is BGN 15.5 billion, including BGN 15.1 billion of fiscal reserve deposits in the BNB and in banks and BGN 0.4 billion of receivables under the EU Funds for certified expenditures, advance payments, etc.

The Consolidated Fiscal Programme implementation data as of 28 February 2023 are published in the Statistics section on the website of the Ministry of Finance. The statistics is accompanied by an Information Bulletin on the Execution of the State Budget and the Main Indicators of the Consolidated Fiscal Programme, which represents a short analysis of the performance of the key budget parameters on a consolidated level and by constituent budgets.