01.11.2017

For the fourth quarter of the year, the Ministry of Finance forecasts traditionally higher expenditures and a decline in the formed budget surplus

Based on preliminary data and estimates the balance of the Consolidated Fiscal Programme (CFP) on a cash basis as of end-October 2017 is expected to be positive, amounting to BGN 2,386.2 millionor 2.4% of forecast GDP. On a monthly basis, the deficit for October is expected to be BGN 34.7 million. The national budget balance reports an improvement in structural terms as compared to the same period of 2016 mainly due to the growth of tax revenues (including social security and health insurance contributions), while the balance of EU fund accounts has deteriorated this year due to a baseline effect in 2016. The latter is related to the EU grants reimbursed to Bulgaria at the beginning of 2016 for expenditures incurred at the end of 2015 which witnessed the peak of project payments under the previous 2007 – 2013 programming period.

Traditionally, part of the planned expenditures for the year are concentrated in the last quarter. This is mainly due to the higher expenditures associated with the payments under infrastructure and investment projects taking into account the stages of their implementation and the end of the construction season. In addition, social expenditures, maintenance expenditures, etc. are higher in the autumn and winter seasons. Because of these factors, expenditures are projected to exceed revenues in the last quarter and the currently reported surplus is expected to fall.

Key CFP parameters on the basis of preliminary data and estimates:

As of October 2017, CFP revenues and grants are expected to be BGN 29,152.4 million (82.3 % of the annual estimates). The performance of tax and non-tax revenues is expected to be 85.5 % of the estimates for the year, which is a growth by BGN 2,222.7 million as compared to the same period of the previous year (8.6 %). Grant revenues as of end-October are lower than in the same period of 2016, with execution as compared to the 2017 annual estimates expected to be 42.2 %.  

The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, as of October 2017 are expected to amount to BGN 26,766.2 million, which is 72.8 % of the annual estimates. The expenditures for the same period of the previous year were to the amount of BGN 24,854.6 million. The growth of expenditures as compared to end-October 2016 is mostly due to the higher social security and health insurance payments, a baseline effect on expenditures on pensions from their increases as from July 2016 and July 2017, expenditures on subsidies and higher personnel expenditures, including due to the growth of insurance payments related to the higher insurance contribution for the Pensions for Persons under Article 69 Fund which increased by 20 percentage points as compared to 2016.

The part of Bulgaria's contribution to the EU budget, paid from the central budget as of 31.10.2017, amounts to BGN 746.2 million, which complies with the current legislation in the area of EU own resources – Council Decision 2014/335/EU, Euratom on the system of own resources of the European Union, Council Regulation (EU, Euratom) No 608/2014 of 26 May 2014 laying down implementing measures for the system of own resources of the European Union, and Council Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements as amended by Council Regulation (EU, Euratom) No 2016/804 of 17 May 2016.

The statistical data and the Information Bulletin on the execution of the state budget and the key indicators of the Consolidated Fiscal Programme based on data from the monthly reports on the cash performance of the budgets of the first-level spending units will be published on the website of the Ministry of Finance at the end of November 2017.