03.11.2014

The first level spending units' monthly reports show that consolidated fiscal programme deficit as of end-September stands at BGN 1,483.2 million, the planned deficit for 2014 being BGN 1,472.3 million. For comparison the deficit for the nine months of the previous year was BGN 361.5 million, which means that year on year the indicator has worsened in nominal terms by BGN 1,121.6 million (1.3 pp of GDP). The delay in planned state budget tax revenue performance and the reported expenditure growth mainly in expenditure on the EU funds accounts, social and health insurance payments, etc. are among the main factors for the formation of the CFP deficit for the first nine months of 2014. Financing for the suspended by the EC payments under OP Environment and under two axes of OP Regional Development continues expecting that after the payments are resumed certified expenditure will be reimbursed.

Consolidated revenues and grants under CFP for the reported period stand at BGN 21,555.7 million, or 69.5 % of the annual plans. Revenues under the CFP as of end-September have risen by BGN 248.3 million (1.2%) compared to the same period of last year. At end-September 2014 tax proceeds, including revenues from social security contributions, total BGN 17,074.9 million, which is 70.2 % of the 2014 plans, while for the same period of 2013 this figure was 72.3%. Compared to the same period of the previous year tax revenues have risen by 3.3% (BGN 552.0 million) in nominal terms, but there is a considerable delay compared to the planned growth for 2014.

Revenues from direct taxes amount to BGN 3,113.0 million, or 72.1% of the annual plans, and are by BGN 270.3 million higher than the same period of the previous year (9.5%).  Corporation tax revenues report growth of 5.5% (BGN 61.3 million). Increase for the nine months of 2014 is also reported in the revenues under PITL - by BGN 209.0 million or 12.0% more than for the same period of last year.

Indirect tax revenues amount to BGN 8,631.9 million, or 67.3% of the annual plans, while for the nine months of 2013 this figure was 72.2%. The underperformance by 4.9 pp compared to the reported performance for the previous year is mainly in VAT and excise duties. Compared to the same period of the previous year tax revenues under the CFP have risen by BGN 31.8 million in nominal terms

VAT revenues amount to BGN 5,515.5 million or 66.6% of the annual plan. Compared to the same period of the previous year VAT revenues are by BGN 34.4 million more, the planned growth being 12.4% compared to those reported for 2013. Excise duty revenues amount to BGN 2,987.1 million or 68.2% of the annual plan. Revenues for the nine months of 2014 are by 0.1% less compared to the same period of last year, the growth planned in the 2014 State Budget Law being 7.9 % compared to those reported for 2013. Custom duties revenues are BGN 111.8 million or 82.1% of the annual plan. Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 648.8 million, or 72.3% of the plans. Revenues from social security and health insurance contributions are BGN 4,681.2 million, or 74.5% of those planned for the year. Compared to the same period of the previous year these revenues have risen by 5.0% (BGN 224.3 million) in nominal terms

Non-tax revenues amount to BGN 2,697.9 million or 77.7 % of the annual plans. This is by BGN 221.6 million less than for the same period of last year which is due to the basic effect of one-off revenues in the first six months of 2013 from dividends for the state and a sum awarded to the state under an arbitration case. Lower compared to September 2013 are the proceeds from state and court charges, fines, sanctions and default interest, concession fees and other non-tax revenues, there being an increase only in state and municipal charges and revenues from sale of non-financial assets.

Grants from the country and abroad (including grants from EU Funds) amount to BGN 1,782.9 million or 55.1% of the annual plan.

The expenditures under the consolidated fiscal programme, including the contribution of the Republic of Bulgaria to the EU budget, as of 30.09.2014 amount to BGN 23,038.9 million, which is 70.9 % of the annual plans. Compared to September 2013 expenditure under the CFP have risen by BGN 1,370.0 million (6.3%), mainly due to the accelerated absorption under European programmes and funds, and to social and health insurance payments growth. Expenditure under the EU funds accounts (including national co-financing) have risen by 32.9% (BGN 755.3 million) compared to the same period of 2013 and expenditure under the national budget - by 3.2% (BGN 614.7 million). The growth in social expenditure is mainly due to the basic effect of the increase of pensions as from 1 April 2013 and to higher health insurance payment in the first months of 2014. The approved by Council of Ministers decrees additional expenditure under the budgets of a number of first level spending units in the last months of the previous government term of office also have an impact on the expenditure performance parameters.

Non-interest expenditures amount to BGN 21,827.8 million or 73.3% of the annual plans. Non-interest current expenditure for the nine months of 2014 amount to BGN 18,806.7 million, or 75.7 % of the plans, capital expenditures (including net increment of state reserve) amount to BGN 3,021.1 million, or 60.9 % of the plans for 2014. Interest payments amount to BGN 510.8 million, or 76.3 % of the plans for 2014.

The part of Bulgaria's contribution to the EU budget, as paid as of 30.09.2014 from the central budget, amounts to BGN 700.3 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.

The budget balance on a cash basis under the Consolidated Fiscal Programme (CFP) as of September 2014 is negative, amounting to BGN 1,483.2 million and is formed by a deficit under the national budget of BGN 657.8 million and a deficit under EU funds of BGN 825.3 million.

Fiscal reserve as of 30.09.2014 is BGN 8.8 billion, including BGN 8.1 billion deposits in BNB and banks and BGN 0.7 billion receivables under the EU Funds for certified expenditure, advance payments, etc. In accordance with §1, point 41 of the Public Finances Law Additional Provisions the fiscal reserve scope has been changed to include the receivables under the EU Funds for certified expenditure, advance payments, etc.

Data on the consolidated programme implementation as of 30 September 2014 are published on the website of the Ministry of Finance in category Topical Publications/Statistics . The statistical data are accompanied by an Information Bulletin on the Execution of the State Budget and the main indicators of the consolidated fiscal programme, which presents a short analysis of the performance of the key budget parameters on a consolidated level and by constituent budgets.