31.08.2013

The budget balance under the Consolidated Fiscal Programme (CFP) as of 31 July 2013 is negative, amounting to BGN 168.2 million and is formed by a deficit under the national budget of BGN 55.0 million and a deficit under EU funds of BGN 113.2 million. On a monthly basis, there is a deficit of BGN 162.0 million in July against the surplus of BGN 138.4 million reported in July 2012. This deficit is mostly due to the high interest expenditure, the higher capital expenditure, etc. In line with the interest calendar, there are higher payments related to debt servicing in July which are mainly interest payments under bond issues on the international financial markets to the amount of BGN 146.3 million (2002 bond issue interest of BGN 67.2 million and 2012 bond issue of BGN 79.0 million). The higher capital expenditure is related to the absorption of EU operational programme funds.

Key CFP parameters for July 2013

Consolidated CFP revenues and grants as of 31 July 2013 stand at BGN 16,609.9 million or 54.3% of the annual plans for 2013 under the State Budget Law (1). The performance of CFP proceeds was 54.3 per cent in the same period of 2012. Compared to 2012, CFP proceeds and grants report a nominal growth by 6.5% (BGN 1,011.6 million) as of July 2013. This growth is formed by a growth in grant revenues (44.4% or BGN 409.8 million more), tax revenues (3.5% or BGN 430.1 million) and non-tax revenues (7.6% or BGN 171.7 million).

At end-July 2013, tax proceeds, including revenues from social security contributions, total BGN 12,852.2 million, which is 54.9 % of the 2013 plans. Tax revenue performance in the same period of last year was 57.5%. Due to the revenue underperformance, the annual plans were revised, with the Law amending the 2013 State Budget of Republic of Bulgaria Law finally adopted in August 2013.

Revenues from direct taxes are BGN 2,384.2 million, or 57.8 % of those planned in the 2013 State Budget Law.

Indirect tax revenues amount to BGN 6,500.9 million, or 52.7 % of the annual plans for 2013. VAT revenues amount to BGN 4,222.6 million, or 53.6 % of the annual plans. It should be noted that the amount of VAT revenue in July is influenced by the higher amount of VAT refunded to companies under the VAT Law, which is part of the business repayment measures of the Government. Proceeds from the other taxes in this group as of 31 July 2013 are as follows: excise duty revenues of BGN 2,184.2 million (50.7% of the annual plans), customs duty revenues of BGN 81.0 million (67.5% of the annual plans) and insurance premium tax of BGN 13 million (46.3% of the annual plans).

Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 526.0 million, or 61.0 % of the plans for 2013. Revenues from social security and health insurance contributions as of 31 July 2013 are BGN 3,441.1 million, or 56.7 % of those planned for the year.

Non-tax revenues amount to BGN 2,424.3 million, or 70.3 % of those planned for the year, and grant proceeds amount to BGN 1,333.3 million, or 35.7% of the plans for 2013.

The expenditures under the consolidated budget, including the contribution of the Republic of Bulgaria to the EU budget, as of 31 July 2013 amount to BGN 16,778.0 million. They account for 52.9 % of those planned for the year against a performance of 51.6% of CFP expenditure for the same period of last year. Compared to the seven months of 2012, CFP expenditures have increased by BGN 1,380.1 million, or by 9.0%. In structural terms, capital expenditures remain at a level close to the one reported in the same period of last year, while social and health insurance payments, interest expenditure, maintenance expenditure, etc., report a growth.

Non-interest current expenditures amount to BGN 13,936.1 million, or 57.8% of the plans, capital expenditures (including net increment of state reserve) amount to BGN 1,641.3 million, or 30.4% of the plans under the 2013 State Budget Law, while interest payments - to BGN 595.5 million, or 68.0 % of the plans for 2013.

The part of Bulgaria's contribution to the EU budget, as paid as of 31 July 2013 from the central budget, amounts to BGN 605.2 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.

Fiscal reserve as of 31 July 2013 amounts to BGN 5.6 billion.

Data on consolidated budget implementation as of 31 July 2013 are published in "Statistics" section on the website of the Ministry of Finance. The statistical data are accompanied by an Information Bulletin on the Execution of the Consolidated Budget which presents a short analysis of the performance of the key budget parameters on a consolidated level and by constituent budgets.

(1) The paper uses data under the 2013 State Budget Law plans before the budget revision made in August 2013 because the Law amending the 2013 State Budget of Republic of Bulgaria Law was approved after the reporting period has ended.