02.05.2023

Based on preliminary data and estimates the budget balance of the Consolidated Fiscal Programme (CFP) as of end-April 2023 is expected to be deficit, amounting to BGN 1,130 million (0.6 % of the forecast GDP). For comparison, a surplus of BGN 882.5 million was reported for the first four months of 2022, which means that on an annual basis the budget balance for the period has deteriorated by around BGN 2 billion. The trend from the previous months of the year is continuing – expenditures growth (around 24 per cent) significantly outpaces revenue growth (12 per cent) which is the main reason for the deterioration of the budget position compared to the previous year. Revenue growth is slowing down as compared to the previous months, mainly due to the lower grant proceeds where grants under EU Programmes and Funds are reported.

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

As of April 2023, CFP revenues, grants and donations are expected to be BGN 19,915 million, increasing by BGN 2,126 million (12 per cent) compared to those reported as of end-April 2022. Compared to the same period of 2022, tax revenues under CFP have risen in nominal terms by BGN 2,043 million (14.6 per cent), non-tax revenues – by BGN 373 million (13 per cent), while proceeds from grants and donations (mainly grants under EU Programmes and Funds) have decreased by BGN 290 million. As regards tax revenues, proceeds from social security contributions have risen in nominal terms by over 17 per cent, while indirect taxes have recorded a more moderate growth of 5.4 per cent, mainly due to lower proceeds in terms of revenues from VAT on imports. One of the factors for the above is the drop in the price of crude oil compared to the same period of the previous year – the average price of crude oil imported for processing in the first quarter of 2022 was about USD 97.7 per barrel on the average, while in the first quarter of 2023 it was USD 54.1 per barrel on the average (a decrease of 47.7 per cent). In addition, the amount of VAT on imports has also been affected by the exchange rate of the US dollar, the drop in the quantities of crude oil imported for processing, as well as the decline in the quantities of imported goods giving rise to VAT. As regards direct taxes, the parameters of revenues from personal income tax and other taxes have performed well (including due to the introduction, as from the beginning of 2023, of the targeted contributions under § 8 of the TFP of the Law on the Implementation of Provisions of the 2022 State Budget of the Republic of Bulgaria Law, the 2022 Public Social Security Budget Law and the 2022 NHIF Budget Law), while revenues from corporate taxes are close to those reported for 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 April 2023 amount to BGN 21,045 million. For comparison, the expenditures under the CFP as of April 2022 amounted to BGN 16,907 million. The most significant increase in the individual expenditure indicators is recorded in terms of pension expenditures, as well as in the part of subsidies, maintenance and staff expenditures, etc.

The part of Republic of Bulgaria's contribution to the EU budget, paid from the central budget as of 30 April 2023, amounts to BGN 585 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 April 2023 will be published on the website of the Ministry of Finance at the end of May 2023.