Bulgaria's May Budget Deficit Smaller Than Expected

Bulgaria's May deficit is BGN 20 M smaller than Finance Minister Djankov's forecast. Photo by BGNES

After having a positive monthly budget balance in April, in May 2010 Bulgaria is back to registering a monthly deficit, announced the Finance Ministry.

The positive news, however, is that the May deficit is BGN 60.2 M, which is one-fourth less than what Finance Minister Simeon Djankov had predicted.

What is more, the May 2010 budget deficit is twice smaller than the one in May 2009, which amounted to BGN 120.1 M.

April 2010 was the first month in many when Bulgaria had a positive budget balance, amounting to BGN 370 M; however, it was largely due to the annual payment of the Bulgarian National Bank to the state budget.

The Finance Ministry data shows also that Bulgaria’s fiscal reserve has decreased by BGN 100 M – down to BGN 6.6 B, from BGN 6.7 B a month ago.

In January-May 2010, Bulgaria’s revenues declined by 15.3% year-on-year, while its expenditures increased by 2.2% year-on-year. This has shown a slight improvement compared to the period of January-April when the revenues had declined by 17.7% year-on-year, while the spending had been increased by 4.4% year-on-year.

Nonetheless, Bulgaria’s budget deficit in the first five months grew to 2% of the GDP compared to 1.9% in the first four months of the year. Bulgaria’s 2010 Revised State Budget Act provides for an annual deficit of 4.8%; the law has been adopted at first reading, and is yet to be voted in its final version at the second readng.

Thus, at the end of May Bulgaria had a deficit amounting to BGN 1.36 B; of that, BGN 1.123 B come from the state budget, while BGN 237.4 M are under Bulgaria’s balance of EU funds and contributions.

Bulgaria’s total revenues amounted to BGN 9.357 B at the end of May, which is 35.3% of the total projected 2010 revenues.

Thus, tax revenues amounted to BGN 7.22 B, which is 77.3% of the total. Direct tax income of the state was BGN 1.675 B, or 45% of the year projection. Revenues from indirect taxes were BGN 3.2 B, or 28% of the planned 2010 amount.

The VAT revenue income was BGN 1.98 B in January-May, or 29% of the total amount forecast for 2010. Another BGN 1.18 B come from excise taxes, only 26% of the total planned for 2010. Customs duties income in the first five months of the year was BGN 44 M, or 32% of the planned year amount.

Bulgaria’s income from other taxes amounted to BGN 336 M, 47% of 2010 plan. The total sum of social security and insurance payments in the country was BGN 2.01 B on May 31, 2010, which is 39% of the total amount projected for 2010.

Bulgaria’s non-tax revenues were BGN 2.13 B in the first five months of the year, which 39.1% of the projected total for 2010.

The annual payment made by the Bulgarian National Bank from its 2009 balance to the state budget in April 2010 was BGN 354.7 M, or 18.2% more than was originally expected.

Bulgaria’s January-May 2010 revenues were BGN 427 M smaller than the revenues in the same period of last year. This has been explained by the Finance Ministry with one-time advance payments from the EU funds made at the beginning of 2009.

Bulgaria’s total state spending in the first five months of the year, including its contribution to the EU budget, amounted to BGN 10.7 B, or 39.7% of the total 2010 projection. Current non-interest expenditures were BGN 9.025 B, or 42.1% of the 2010 projection. Capital spending was BGN 1.078 B, including 27.4% of the total amount envisaged for 2010, while interest payments are BGN 286 M, 49.2% of the forecast 2010 total.

Compared to the same period of 2009, Bulgaria’s state spending has increased by BGN 229.2 M; the non-interest expenditures are up by BGN 244.2 M.

In the first five months of the year, the Bulgarian government has paid BGN 641 M more year-on-year for social security and health insurance.

Bulgaria’s interest payments declined by BGN 34.5 M year-on-year, while capital spending is BGN 339.4 M (23.9%) smaller that in January-May of 2009.

Bulgaria’s contribution to the EU budget as paid by the end of May 2010 was BGN 328.7 M in accordance with regulation 1150/2000 of the EU Council.

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