29.09.2014

"The draft revision of the budget for this year is an expert forecast which will be assessed by the next cabinet and Parliament", said Minister of Finance Rumen Porodzanov during the presentation of the motives for amendment and supplement to the 2014 State Budget Law before leading economists and financial analysers from the non-governmental sector and the academic circles today at the Ministry of Finance.

Minister Porodzanov commented that the analysis of the performance of the revenue parameters showed a serious lag on an annual basis behind the ones planned in the 2014 SBRBL. He pointed out that the reasons for that were complex - macroeconomic, administrative, legislative and others. In addition to the overestimation of the projections for the economic situation, there was an underestimation of the influence of a number of unfavourable factors such as the lower base for tax collection, the deteriorated economic environment, the absence of political stability, the minimum investments and the withdrawal of investors from our country. He reminded that the Ministries should have worked with budgets reduced by 22% - there was a 12% reduction as back as in the planning of the budget due to ensuring resources for the Public Investment Programme, 5% was the planned cushion for the Ministries and additional 5% economies were laid down in July this year after the adoption of the revision of NHIF's budget.

The Finance Minister also explained that after a series of meetings and consultations with the Ministries the latter had declared a shortage of funds of BGN 1 billion by the end of the year, but the Ministry of Finance had in turn minimized the declared expenditures within some normal limits required for the functioning of the Ministries. The Minister pointed out that most problems were in the unreformed structures.

Minister Porodzanov also said that the proposed increase in the debt ceiling in the budget revision had also a preventive purpose. The plans are to provide additional debt in the amount of up to BGN 4,5 billion for 2014 to finance the higher deficit and to ensure a reliable cushion for liquidity support to the banking sector.

Some of the invited economists presented their written opinions on the Law amending and supplementing the 2014 SBRBL and in the discussion that followed most participants expressed their opinions for and against the necessity of budget revision as well as under the individual parameters of the draft law.

We would like to remind you that such discussion with economists and financial analysers is traditional for MoF and the active participation of the experts contributes to the constructive dialogue on one of the most important topics for the country.