05.03.2025

The budget implementation in the first two months of 2025 takes place in the context of an unadopted Law on the 2025 State Budget of the Republic of Bulgaria. Accordingly, this imposes certain constraints on the state budget which the Ministry of Finance should apply. The provision of Article 87(1) of the Public Finance Law stipulates that state budget expenditures and transfers shall be made in an amount not greater than their amount for the same period of the previous year, up to the amount of revenues, grants and donations received, taking into account the acts of the National Assembly and the Council of Ministers in force that provide for additional or reduced budgetary allocations. These norms have been further developed in the Law on Revenue Collection and Expenditures in 2025 until the Adoption of the Law on the 2025 State Budget of the Republic of Bulgaria, the Law on the 2025 Budget of the State Public Insurance and the Law on the 2025 Budget of the National Health Insurance Fund, and, accordingly, the Ministry of Finance strictly monitors the parameters of state budget revenues, expenditures and transfers.

Based on the preliminary estimates, at the end of February, state budget expenditures and transfers are higher than the amount of revenues and grants for the same period. This made it necessary for the Council of Ministers to approve by a decision the financing of transfers from the state budget to the budget of the state social security and to the budgets of the municipalities on account of the money in cash from the previous year. This ensured the necessary financing for the normal functioning of all budgetary systems, including the payment of the statutory social payments, staff costs, etc.

According to preliminary data and estimates, state budget expenditures and transfers exceed revenues, grants and donations for the first two months of 2025, with the state budget balance expected to amount to a deficit of around BGN 1.5 billion (0.7% of the projected GDP).

Key parameters of the Consolidated Fiscal Programme (CFP) as of the end of February based on preliminary data and estimates

The Consolidated Fiscal Programme (CFP) budget balance as of end-February 2025 is expected to be negative, amounting to BGN 1.0 million (0.5% of the projected GDP). For comparison, on a comparable basis (eliminating the reimbursement transaction from the external funds account of the Ministry of Regional Development and Public Works), the CFP budget balance at end-February 2024 is a deficit of BGN 0.2 billion (0.1 percent of GDP). On a monthly basis, the deficit for February 2025 is expected to amount to around BGN 1.6 billion.

Based on preliminary data and estimates, as of February 2025, CFP revenues, grants and donations are expected to be BGN 11.0 billion, increasing by BGN 1.1 billion (10.6 per cent) compared to those reported in the first two months of 2024. This growth is mainly due to tax revenues, which increase by 13.0% (BGN 1.0 billion in nominal terms) compared to February 2024, while non-tax revenues and proceeds in the part of grants and donations are close to those reported for the same period of 2024.

As of February 2025, the Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, amount to BGN 12.0 billion. For comparison, CFP expenditures for the first two months of 2024 amount to BGN 9.0 billion, and it should be taken into account that in February 2024 there was a reported reimbursement transaction of BGN 1.2 billion from the external funds account of the Ministry of Regional Development and Public Works back to the Ministry’s budget[1]. In accordance with the cash-based budgeting methodology, the expenditures reimbursed from the external funds account has been recorded as a reduction in the capital expenditure part of the budget of the Ministry of Regional Development and Public Works where a cash expenditure of the same amount had been recorded in December 2023. The CFP capital expenditures in the cash report at the end of February 2024 are therefore negative, amounting to BGN 0.8 billion. Eliminating this transaction, for comparability with the 2024 data, expenditures as of the end of February 2025 increases by BGN 1.9 billion (18.2%). An increase is expected in the spending on social payments, including pension expenditures, as well as on personnel costs, subsidies, etc.

The part of the Republic of Bulgaria’s contribution to the EU budget paid from the central budget as of 28.02.2025 amounts to BGN 0.3 billion, which complies with the existing legislation in the area of EU own resources.

The statistical data and the Information Bulletin on the Execution of the State Budget and the key Consolidated Fiscal Programme indicators based on the monthly data on cash execution of first-level spending units as of February 2025 will be published on the website of the Ministry of Finance at the end of March 2025.

[1] In February 2024, in execution of Article 71(1) of Council of Ministers’ Decree No 13 of 2024, a total amount of BGN 1,200.0 million was reimbursed to the budget of the Ministry of Regional Development and Public Works (MRDPW) from the external funds account which are reported as reimbursed (negative) expenditures according the budgetary methodology.