30.04.2014

Fiscal reserve as of 31.03.2014 is BGN 5.9 billion, including BGN 5.1 billion deposits in BNB and banks and BGN 0.8 billion receivables under the EU Funds for certified expenditure, advance payments, etc. In accordance with §1, point 41 of the Public Finances Law Additional Provisions the fiscal reserve scope has been changed to include the receivables under the EU Funds for certified expenditure, advance payments, etc. For comparison the fiscal reserve as of 31.03.2013 was BGN 4.2 billion.

The budget balance under the Consolidated Fiscal Programme (CFP) on a cash basis as of the end of the first quarter of 2014 is negative, amounting to BGN 874.0 million and is formed by a deficit under the national budget of BGN 624.9 million and a deficit under EU funds of BGN 249.1 million. Compared to the same period of the previous year the deficit under the CFP has risen by BGN 76.2 million in nominal terms (0.1 pps of GDP) mainly due to the higher expenditure under European programmes and funds and to the basic effect of the increase of pensions as from 1 April 2013.

Consolidated revenues and grants under CFP as of March 2014 stand at BGN 6,574.9 million, or 21.2 % of the annual plans for 2014 under the State Budget Law. For comparison, revenues and grants stood at 20.3% of the 2013 plan for the first quarter. Compared to March 2013 revenues under the CFP have risen by BGN 417.1 million (6.8%), the rise being mainly due to grants.

At end-March 2014 tax proceeds, including revenues from social security contributions, total BGN 5,199.6 million, which is 79.1 % of all proceeds under the CFP. The proceeds in the group represent 21.4% of the 2014 budget planned revenues.

Revenues from direct taxes amount to BGN 1,075.3 million, or 24.9% of the annual plans, and are by 10.1% higher than the same period of the previous year. The increase in nominal terms compared to the same period of 2013 is BGN 99.1 million, the main contribution thereto having the personal income tax. Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 217.9 million, or 24.3 % of the plans for 2014. Revenues from social security and health insurance contributions are BGN 1,395.9 million, or 22.2% of the annual plans, and compared to the same period of the previous year are by BGN 77.2 million more.

As of 31.03.20124 revenues from indirect taxes amount to BGN 2,510.4 million or 19.6 % of the annual plans of which VAT revenues amount to BGN 1,617.3 million, or 19.5%; excise duty revenues of BGN 855.1 million, or 19.5%; customs duty revenues of BGN 35.0 million, or 25.7%. For comparison, revenues from indirect taxes for the first quarter of 2013 were BGN 2,647.4 million or by BGN 137 million more. The decrease in revenues from indirect taxes is mainly the result of increased VAT and excise duties refund in the first quarter of 2014 compared with the same period of 2013. The VAT refunded in the period January-March 2013 was BGN 1,383 million, while for the same period of 2014 - BGN 1,487 million, or by BGN 104 million more. In the first quarter of 2014 the excise duties refunded amounted to BGN 47.8 million or by BGN 5.5 million more compared to the same period of 2013. The strict observance of the deadlines for VAT and excise duties refunding that has begun at the beginning of the term of office of the Government is consistent with the policy the state to establish itself as an upright payer and partner of the businesses and is a tool for creating normal conditions for growth and development. The basic effect of received in February 2013 arrears to the amount of BGN 65 million should also be taken into account; they had a one-off effect for 2013, so that makes VAT revenues for the two periods incomparable. An impact on the VAT proceeds from imports have also the planned repairs of the manufacturing facilities of a large economic operator which postpones parts of the supplies of raw materials for production and respectively VAT payment due on imports for future periods.

Non-tax revenues and grants amount to BGN 1,375.3 million, or 20.5 % of those planned for the year. A considerable increase of grants is observed related to the accelerated absorption under European programmes and funds. Grants increase more than three and half times compared to the same period of the previous year and in nominal terms BGN 364.3 million more have been received in the period January-March compared to the first quarter of 2013. As of the end of March 2014 grants amount to BGN 517.4 million, while as of March 2013 they were only BGN 153.1 million.

The expenditures under the consolidated fiscal programme, including the contribution of the Republic of Bulgaria to the EU budget, as of 31.03.2014 amount to BGN 7,448.9 million, which is 22.9 % of the annual plans. Compared to March 2013 expenditure under the CFP have risen by BGN 493.3 million (7.1%) mainly due to the basic effect of the increase of pensions as from 1 April 2013 and to the accelerated absorption under European programmes and funds. It is important to note that expenditure under the EU funds accounts (including national co-financing) have almost doubled compared to the same period of 2013, which is linked with the better EU funds absorption, while national budget expenditure remain close to the reported for the same period of 2013 in nominal terms. EU funds expenditure (including national co-financing) amount to BGN 915.4 million as of the end of March 2014, the reported for the same period of 2013 being BGN 503.2 million. In structural terms maintenance and interest payments are lower compared to the same period of last year, while social and health insurance payments and capital expenditure have risen. Capital expenditure growth (including net increment of state reserve) is again linked with the higher payments under EU programmes and funds. As of end-March 2014 they amount to BGN 784.0 million, or by BGN 258.5 more compared to the same period of the previous year - BGN 525.4 million.

Non-interest expenditures amount to BGN 6,900.6 million and are by BGN 591.7 million more compared to March 2013. Non-interest current expenditure as of March 2014 amount to BGN 6,116.7 million, or 24.7 % of the plans, capital expenditure (including net increment of state reserve) amount to BGN 784.0 million, or 15.7 % of the plans for 2014. Interest payments amount to BGN 199.5 million, or 29.8 % of the plans for 2014.

The part of Bulgaria's contribution to the EU budget, as paid as of 31.03.2014 from the central budget, amounts to BGN 348.8 million, which complies with Council Regulation 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities' own resources.

Data on consolidated fiscal programme implementation as of 31 March 2014 are published on the website of the Ministry of Finance in "Statistics" section. The statistical data are accompanied by an Information Bulletin on the Execution of the State Budget and the main indicators of the consolidated fiscal programme, which presents a short analysis of the performance of the key budget parameters on a consolidated level and by constituent budgets.