01.09.2022

Based on preliminary data and estimates the budget balance of the Consolidated Fiscal Programme (CFP) as of August 2022 is expected to be positive, amounting to BGN 1,650 million (1.1 % of the forecast GDP).

A current excess of revenues over expenditures as of August has become a tradition in the previous five years and is mainly due to the shifting of a significant part of the payments on planned expenditures for the year to the last quarter, resulting in a lower amount of expenditures incurred so far. The level of utilisation of expenditures for the first eight months of 2022 compared to the revised annual estimates to the 2022 State Budget of the Republic of Bulgaria Law is around 57 %, which is relatively low compared to previous years. CFP expenditures are expected to increase in the coming months, mainly due to the higher social expenditures following the increase in pensions, the higher expenditures related to the approved sector-specific anti-crisis measures, as well as the expenditures under the programme for compensation of end non-domestic consumers of electricity outside the regulated market which were approved at the beginning of July with the revision of the 2022 State Budget of the Republic of Bulgaria Law. A significant part of the expenditure measures adopted with the revision from July are still at an early stage and are yet to be fully implemented in the coming months which – together with the traditional concentration of the major part of capital expenditure in the last quarter – will lead to a substantial increase in expenditures. For this reason, the current CFP budget balance may not be interpreted as an indicator of the size of the budget balance in annual terms.

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

As of August 2022, CFP revenues, grants and donations are expected to be BGN 39,235 million (65.8 % of the annual estimates), growing by BGN 5,751 million. (17.2%) compared to the same period of 2021. Compared to August 2021, tax proceeds under CFP rise by BGN 3,867 million in nominal terms, non-tax proceeds – by BGN 1,656 million, and proceeds from grants and donations (mostly EU programme and fund grants) – by BGN 228 million.

It should be borne in mind that, pursuant to §24 of the Transitional and Final Provisions of the 2022 State Budget of the Republic of Bulgaria Law, as from July public enterprises in the energy sector pay contributions to the budget of the Electricity System Security Fund which are used to cover the expenditures under Article 36b(1)(4) of the Energy Law. For this reason, in terms of non-tax revenues there was a baseline effect in 2021 when no such contributions were paid. Similarly, in terms of the expenditures on subsidies under the budget of the Electricity System Security Fund, pursuant to §23 of the Transitional and Final Provisions of the 2022 State Budget of the Republic of Bulgaria Law compensations are paid to end non-domestic consumers of electricity outside the regulated market which should also be taken into account when making comparison with the same period of the previous year.

The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, as of August 2022 amount to BGN 37,585 million (57.0 % of the annual estimates). For comparison, the expenditures under the CFP as of August 2021 amounted to BGN 32,603.3 million.

The part of Republic of Bulgaria's contribution to the EU budget, paid from the central budget as of 31 August 2022, amounts to BGN 1,094 million, which complies with the current legislation in the area of EU own resources.

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 as of August 2022 will be published on the website of the Ministry of Finance at the end of September 2022.

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