Bulgaria Likely to Register Smaller Budget Deficit in 2010 than Expected

Bulgarian Finance Minister Simeon Djankov may see his budget perform better than expected. Photo by BGNES

Bulgaria registered a budget deficit of only 2,65% in the first eleven months of 2010, which is far below the forecast of the revised 2010 State Budget Act of 4,8% for the entire 2010, according to latest financial data.

This becomes clear from data released Thursday by the Finance Ministry, which indicates that it is almost impossible for Bulgaria to complete 2010 with the budget deficit forecast in state budget act revised in June.

Thus, in January-November 2010, Bulgaria accrued a deficit of BGN 1.866 B, and to reach the 2010 forecast figure of BGN 3.691 B, the government will have to add close to BGN 2 B to the deficit in December alone.

Bulgaria's consolidated budget fiscal program actually saw a deficit of BGN 1.967 B in the first eleven months of 2010 but part of that is covered by the BGN 101.3 M surplus in Bulgaria's EU dealings.

In November alone, the Bulgarian state budget registered a surplus of BGN 36.5 M.

In the first 11 months of the year, Bulgaria's state revenues amounted to BGN 21.355 B, or 87% of the year forecast. The total tax revenues are BGN 16.985 B, which is 79.5% of the total state revenues in that period.

BGN 3.08 B came from direct taxes (88.5% of the 2010 forecast amount); indirect taxes brought BGN 8.8 B (89.3% of the 2010 forecast amount). The income from VAT was BGN 5.46 B (93.2% of the 2010 forecast), and from excise taxes – BGN 3.229 B (82.8% of the 2010 projection); revenues from customs duties amounted to BGN 110 M, 119% of the expected amount.

The sum raised from property and other taxes in Jan-Nov 2010 was BGN 640.5 M (88.9% of the expected amount). The income from social security and health insurance was BGN 4.466 B, or 86.4% of the projection.

In the second half of 2010, the government saw an year-on-year growth of indirect taxes – they increased by BGN 354.8 M in July-November 2010 compared with the same period of 2009.

Non-tax state revenue in the specified period amounted to BGN 3.078 B, or 90.6% of the projected amount.

The foreign aid that Bulgaria got in Jan-Nov 2010 amounted to BGN 1.292 B (66.9% of the projection), which is BGN 92.4 M (7.7%) increase compared with the same period of 2009.

Bulgaria's state spending in first eleven months of 2010, including Bulgaria's contribution to the EU budget, amounted to BGN 23.221 B, which is 83.5% of the projected amount. Non-interest spending was BGN 19.54, or 91.7% of the forecast amount. Compared with the same period of 2009, the non-interest spending grew by 5.1% (BGN 943 M). The spending for social security and health insurance increased by BGN 912 M.

BGN 494 M more went to cover the increase of retirement pensions approved in the first half of 2009.

Capital spending amounted to BGN 2.596 B, or 68.5% of the 2010 forecast, and interest payments amounted to BGN 470 M, or 92.5% of the projected amount for 2010.

In the first 11 months of 2010, Bulgaria contributed to the EU budget a total of BGN 614.7 M.

In November 2010, Bulgaria's fiscal reserve was BGN 6.4 B.

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