2012 BUDGET DEFICIT STANDS AT 1.3% OF GDP

The 2012 budget deficit is 1.3% (BGN 1.09 bn) of Bulgaria’s gross domestic product (GDP) and is slightly lower than the projected 2% in the State Budget Act, according to the report of the Finance Minister on the implementation of the republican budget for 2012. The budget balance under the Consolidated Fiscal Programme (CFP) for 2012 was negative, amounting to BGN 350 mln, or 0.45% of the projected GDP. The 2011 deficit under CFP stood at BGN 1.49 bn (2% of GDP).

The budget balance under the CFP at the end of 2012 was formed by a national budget deficit of BGN 680 mln and a surplus under EU funds amounting to BGN 330 mln.

CFP revenues and grants for 2012 stood at BGN 27.5 bn, or 35.4% of the projected GDP. Compared to 2011, the revenues on a consolidated level increased by 8.2% in nominal terms, i.e. budget revenues grew by BGN 2.9 bn. Tax proceeds reported an increase of 4.5% (BGN 929 mln), compared to 2011, while non-tax proceeds and grants rose by 24.3% (BGN 1.16 bn).

Tax proceeds (including revenues from social security contributions) for 2012 totaled BGN 21.5 bn, which is 99.7% of the annual budget estimates. Revenues from direct taxes amounted to BGN 3.77 bn, reporting an increase of BGN 110 mln (2.7%), compared to 2011. Revenues from indirect taxes amounted to BGN 11.34 bn lev, registering a nominal increase of 6.8%, or BGN 718 mln over the previous year. Revenues from social security and health insurance contributions totaled BGN 5.59 bn last year, 0.5% more than projected. Revenues from other taxes (including property taxes) amounted to BGN 815 mln.

The expenditures under the consolidated budget (including the contribution of the Republic of Bulgaria to the EU budget) for 2012 amounted to BGN 27.82 bn, or 93.2% of the planned for the year. These included BGN 22.77 bn in current expenditures and BGN 3.67 bn in capital expenditures. Bulgaria’s contribution to the EU budget paid by the central budget in 2012 amounted to BGN 809 mln.

The fiscal reserve, which should not drop below BGN 4.7 bn by law, stood at BGN 6.1 bn as of December 31, 2012.