BIA'S STATEMENT ON THE DRAFT LAW FOR AMENDMENT AND SUPPLEMENT OF THE STATE BUDGET OF THE REPUBLIC OF BULGARIA

TO

MRS. MENDA STOYANOVA -

CHAIRMAN OF THE COMMITTEE ON BUDGET AND FINANCE OF THE SC

Subject: Bill amending and supplementing the State Budget of the Republic of Bulgaria Act for 2020 (signature 002-01-14 of 31.03.2020)

DEAR MRS. STOYANOVA,

I present to your attention the opinion of BIA on the draft Law for amendment and supplement of the state budget of the Republic of Bulgaria:

We support the approach taken in preparing the macroeconomic scenario of not increasing the tax burden and limiting spending below 40% of expected GDP.

We also support the capital increase of the Bulgarian Development Bank (BDB) to provide additional liquidity through portfolio guarantees for commercial banks to provide business loans in the amount of BGN 2.5 billion and interest-free loans for unpaid leave while maintaining of labor relations.

We understand the need to update the budget of the Social Security, respectively - to assume additional debt to provide resources for the proposed schemes. At the same time, we object to the proposed increase in the allowable maximum amount of government debt to be set at BGN 31.5 billion by the end of the year. The increase in the eligible limit for new debt (up to BGN 10 billion) is almost twice as large as the volume of the deficit increase (BGN 3.5 billion) set in the draft law and the replenishment of BDB's capital (BGN 0.7 billion).

Additional unused reserves exist in the possibility of budget restructuring and reduction of inefficient costs.

WITH RESPECT,

RADOSVET RADEV

Chairman of the Board of BIA