29.07.2016

Based on the monthly data of first-level spending units, the Consolidated Fiscal Programme (CFP) balance on a cash basis as of end-June 2016 is positive, amounting to BGN 3,071.2 million, or 3.4% of the projected GDP, and is formed by a national budget surplus of BGN 1,665.3 million and a surplus of EU funds of BGN 1,405.9 million. This has been the most considerable excess of revenues over expenditures under the CFP for the first six months of the year since 2008. For comparison, a CFP surplus of BGN 889.5 million (1.0% of GDP) was reported in the first six months of 2015, which means that, as a relative share of GDP, the budget stance has improved by 2.4 percentage points. The factors for the improvement in the budget stance continue to be the higher revenues and the cutting of expenditures in comparison to the same period of the previous year. In addition to the good national budget revenue parameters, the EU fund accounts also influence the current CFP balance, with the excess of revenues over expenditures there accounting for 1.6% of the projected GDP.

The CFP revenues and grants in June 2016 stand at BGN 17,709.5 million, or at 53.6% of the annual estimates. Compared to the first half of 2015, revenues and grants have risen by BGN 1,405.9 million, or by 8.6%. The growth in comparison to the previous year is due to the higher tax and non-tax revenues which have grown by BGN 1,472.1 million, whereas grant proceeds (Commission refunds) have dropped by BGN 66.2 million. Nevertheless, the execution of grant proceeds as against the estimates is good, with domestic and foreign grant proceeds, mostly end-2015 certified expenditures reimbursed under the EU operational programmes and funds for the old programming period 2007-2013, and advance payments received by the Commission for the new programming period 2014-2020, amounting to BGN 1,932.4 million, which accounts for 76.0% of the annual estimates.

The tax proceeds, including revenues from social security contributions, total BGN 13,488.9 million, which accounts for 51.9% of the revenues planned for the year. Compared to June 2015, tax proceeds have risen in nominal terms by 9.8%, or by BGN 1,202.8 million. In structural terms, the proceeds from indirect taxes report the most considerable growth.

The direct tax revenues amount to BGN 2,538.9 million, or 54.2% of those planned in the 2016 State Budget of the Republic of Bulgaria Law, growing by BGN 174.4 million, or by 7.4%, in comparison to the first half of 2015.

Revenues from indirect taxes amount to BGN 6,834.6 million, which accounts for 51.5% of the 2016 State Budget of the Republic of Bulgaria Law estimates. Compared to the previous year, the proceeds in this group have grown by BGN 794.5 million, or by 13.2%. The VAT proceeds in the first six months of the year amount to BGN 4,355.6 million, or 51.8% of those planned for the year. Compared to the previous year, the VAT revenues have risen by BGN 409.3 million. The amount of the non-refunded VAT as of end-June is BGN 122.9 million. There is also a growth in the excise duty revenues which amount to BGN 2,380.6 million, or 51.0% of the annual estimates, while as against June 2015 they have grown by 18.6%, or by BGN 373.9 million. The customs duty proceeds amount to BGN 83.6 million, or 55.7% of those planned for the year.

Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 591.0 million, or 64.8% of the annual estimates.

Revenues from social security and health insurance contributions are BGN 3,524.3 million, which accounts for 49.4% of the estimates for the year. Compared to the previous year, the revenues from social security contributions have risen by 5.1%, or by BGN 172.4 million, in nominal terms. 

Non-tax revenues amount to BGN 2,288.2 million, which accounts for 51.1% of the annual estimates, and is by BGN 269.3 million, or 13.3%, more than end-June 2015.

The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget for June 2016, amount to BGN 14,638.3 million, which accounts for 42.0% of the annual estimates. For comparison, the CFP expenditures as of June 2015 amount to BGN 15,414.0 million. The lower absorption of expenditures in the first six months of the year is mostly linked to a delay in some capital expenditures (mostly EU fund accounts), which is due, on the one hand, to the low absorption at the initial stage of project implementation during the new programming period 2014-2020, and, on the other hand, to the shifting of the majority of capital expenditures to the last quarter of the year due to some technological and procedural factors.

Non-interest expenditures amount to BGN 13,879.7 million, which accounts for 42.6% of the annual estimates. Non-interest current expenditure as of June 2016 amount to BGN 13,012.7 million, or 49.1% of the annual estimates, capital expenditures (including net increment of state reserve) amount to BGN 867.1 million, or 14.2% of the 2016 State Budget of the Republic Bulgaria Law estimates. Interest payments amount to BGN 361.2 million, or 45.0% of those planned for 2016.

The part of Bulgaria's contribution to the EU budget, as paid as of June 2016 from the central budget, amounts to BGN 397.4 million, which complies with the existing legislation in the area of EU own resources, Council Decision 2007/436/EC, Euratom on the system of the Communities' own resources and Council Regulation No 1150/2000, as amended by Regulation No 2018/2004, Regulation No 105/2009 and Regulation No 1377/2014, implementing Decision 2007/436/EC.

Fiscal reserve as of 30.06.2014 is BGN 14.1 billion, including BGN 12.6 billion of deposits in the BNB and banks and BGN 1.5 billion of receivables under the EU Funds for certified expenditure, advance payments, etc. 

The Consolidated Fiscal Programme implementation data as of 30 June 2016 are published on the website of the Ministry of Finance, in Statistics section.