31.07.2013

The budget balance under the Consolidated Fiscal Programme (CFP) on a cash basis for the first six months of 2013 is negative, amounting to BGN 7.6 million and is formed by a surplus under the national budget of BGN 104.8 million and a deficit under EU funds of BGN 112.4 million. However, it should be taken into account that regardless of the low deficit for the first six months, the tax revenue trends are negative and a serious underperformance of the 2013 State Budget Law plans are expected. The traditional seasonal shifting of some of the expenditure to the second half of the year is the main reason for this low deficit, while revenue performance after the peak of the tax campaign in April and the sizeable one-off revenue (state dividends from state-owned enterprises, BNB contribution, etc.) is 46.3 % of the annual plans. Tax revenue performance for the first six months of the year accounts for 46.8 % of the plans under the 2013 State Budget Law and is lower by 2.1 percentage points against the same period of last year when it was 48.9 %.

Consolidated CFP revenues and grants for the first six months of 2013 stand at BGN 14,165.4 million or 46.3 % of the annual plans for 2013. Compared to the same period of 2012, CFP proceeds and grants report a nominal growth by 7.1 % (BGN 941.1 million). This growth is formed by a growth in grant revenues (64.6 % or BGN 427.0 million), tax revenues (3.6 % or BGN 382.3 million) and non-tax revenues (6.6 % or 132.0 million) but it should be taken into account that the 2013 State Budget Law plans a nominal growth in tax revenue of BGN 1.8 billion, or 8.4 %, compared to the 2012 State Budget Law plans, while the nominal growth in tax revenues compared to the same period of last year is just 3.6 %.

At end-June 2013, tax proceeds, including revenues from social security contributions, total BGN 10,944.5 million, which is 77.3 % of the total CFP proceeds. Performance is 46.8 % of the annual plans against 48.9 % in the same period of last year. There is an underperformance mostly in the excise duty revenues, the VAT revenues, the revenues from PIT, CIT and other taxes, as well as in the revenues from social security contributions. The key factors for this are the pessimistic development of the macroeconomic indicators against the assumptions of the macro framework of the 2013 budget, the modified GDP structure, the legislative amendments that shift some of the proceeds for the beginning of 2014 and the budgetary effects of which have not been taken into account at the stage of planning the 2013 State Budget Law revenues, etc.

Revenues from direct taxes are BGN 2,168.5 million, or 52.5 % of the planned for the year against 55.3 % for the same period of 2012. Indirect tax revenues amount to BGN 5,521.5 million, or 44.7 % of the programme for the year against 46.8 % for the first half of 2012. In the first six months of 2013 VAT revenues amount to BGN 3,639.0 million, or 46.2 % of the annual plans (48.2 % for the first half of 2012); excise duty revenues amount to BGN 1,806.3 million, or 41.9 % of the annual plans (44.3 % for the first half of 2012); customs duty revenues amount to BGN 66.3 million, or 55.3 % of the annual plans (47.5 % for the first half of 2012). Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 449.5 million, or 52.1 % of the plans for the year. Revenues from social security and health insurance contributions as of 30 June 2013 are BGN 2,805.0 million, or 46.2 % of those planned for the year compared to the performance of 48.2 % in the first half of last year.

Non-tax revenues amount to BGN 2,132.9 million, or 61.9 % of those planned for the year, against BGN 2,001.0 million in the same period of last year when the performance of the annual plans was close to the current level (61.8 %).

CFP grant proceeds as of 30 June 2013 amount to BGN 1,088.0 million (29.1 % of the plans) against BGN 661.1 million (16.9 % of the plans) as of the first half of 2012.

The expenditures under the consolidated budget, including the contribution of the Republic of Bulgaria to the EU budget, as of 30 June 2013 amount to BGN 14,173.0 million, or 44.7 % of the planned for the year. The arrears and the depleted statutory reserves resulting from extraordinary expenditures approved by Council of Ministers' Decrees in the first five months of the year put serious pressure on the execution of budget expenditure. The lack of any flexibility regarding expenditure does not allow any off-set measures to be taken in order to tackle the pressure on the budget stance as a result from the expected revenue underperformance.

Non-interest current expenditures amount to BGN 11,925.2 million, or 49.4 % of the plans, capital expenditures (including net increment of state reserve) amount to BGN 1,334.5 million, or 24.7% of the plans under the 2013State Budget Law, while interest payments - to BGN 379.8 million, or 43.4 % of the plans for 2013.

The part of Bulgaria's contribution to the EU budget, as paid for the first six months of 2013 from the central budget, amounts to BGN 533.4 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 30 June 2013 amounts to BGN 5.8 billion.

Data on consolidated budget implementation as of 30 June 2013 are published in "Budget/Statistics" section on the website of the Ministry of Finance.