23.11.2013

The estimates for 2014 are quite realistic because we are already seeing symptoms of consumption and business revival, Deputy Minister of Finance Lyudmila Elkova said in an interview for the Banker newspaper. According to her a 1.8% GDP growth next year is quite possible and this forecast has been confirmed to a great extent by the IMF mission that completed its work in Bulgaria a week before. Elkova specified that when the macro framework was developed the impact of such a large investment project as South Stream had not been taken into account. That impact could be an upward one in respect of GDP growth, which might exceed the provided for 1.8%.

"There are always risks for a forecast not to come true. We understand that there are risks and for this reason we have provided for buffers in the budget", Elkova specified. One of those is the so-called 5% rule under which first level spending units will be allowed to spend 95% of the funds provided for in the budget until September. The remaining 5% will be disbursed when the implementation of the revenue projections is clear, the Deputy Minister of Finance clarified. She put an emphasis on the Public Investment Programme "Growth and Sustainable Development of the Regions" amounting to BGN 500 million and on yet another fund of BGN 100 million whereby again on a competition principle projects in the field of education will be financed. Elkova was adamant that the money for European projects could not be treated as a buffer. "At the moment we are completing the relevant budget period under the European programmes, but under projects that have been completed or are in the process of implementation we will continue to receive European funds in the next two or three years", she added.

Deputy Minister Elkova listed better collection and more effective fight against the contraband in respect of customs and excise duties in particular among the priorities in the revenue area. In addition, it is necessary to clear some confusions in tax revenues that have arisen by the introduction of the single payment document and the repeal of the advance collection of the tax on natural persons' income for the last three months of the year. "The planned for 2014 non-tax revenues are almost by BGN 470 million less that the provided for in the present budget which demonstrates that we are observing our commitment to lower the administrative burden on the businesses by lowering or repealing some state fees", Elkova emphasized.

Concerning the new debt to be issued next year the Deputy Minister of Finance said that it would amount to BGN 4.4 billion. Part of it will be used to finance the budget deficit of BGN 1.4 billion and the greater part of the remaining BGN 3 billion will go in the fiscal reserve and will be used to cover old debt in 2014 and to pay the Global Bond at the beginning of 2015. Lyudmila Elkova added that we were in the process of negotiating with the European Investment Bank a loan of EUR 500 million for bridge financing of European projects in the next programming period 2014-2020.