Bulgaria's Finance Ministry Presents Budget Actualization Proposal

Bulgaria's Finance Ministry has published its budget actualization proposal, claiming that the step is necessary to implement measures to boost economic growth, improve the business climate and support people with disabilities.

The Finance Ministry proposes an increase in the budget deficit by BGN 493.4 M to 2% of the GDP, according to reports of dnevnik.bg.

In order to achieve this, the maximum amount of new government debt which can be taken in 2013 will be increased.

In order to provide a fiscal reserve buffer to minimize potential liquidity risks, the borrowing ceiling is increased by BGN 1 B.

The Finance Ministry notes that the revision was triggered by the over-optimistic 1.9% GDP growth forecast set during the planning of Budget 2013.

Bulgaria's Finance Ministry expects GDP growth to reach up to 1% in 2013.

The institution informs that receipts from VAT, excise duty, and the new 10% tax on interest earned on bank deposits, will fall short of the target.

Tax receipts underperformance is expected to amount to around BGN 55 M.

The Finance Ministry plans to provide BGN 160.4 M to settle outstanding debts to the business sector (accumulated mainly by the Defense, Interior and Justice ministries) and BGN 40 M for social benefits to the most vulnerable groups.

The sum earmarked for food vouchers increases from BGN 160 M to BGN 200 M and there are also allocations to the healthcare sector and agricultural producers.

The Finance Ministry assures that the budget actualization will not impair Bulgaria's financial and fiscal stability and reminds that the increase in the budget deficit does not exceed the limit prescribed by the Maastricht criteria.

The Finance Ministry argues that there will be continuity as regards fiscal stability and the revision will provide a more realistic ground for the preparation of Budget 2014.

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