Bulgarian Finance Minister Envisages BGN 710 Min. Salary and BGN 3,400 Max. Insurance Income

Finance | January 21, 2022, Friday // 16:44|  views


The Deputy Prime Minister and Minister of Finance Asen Vassilev defined the draft financial framework as a “budget for economic growth”. It envisages economic growth of 4.8%. It will enter into force on April 1, when the minimum wage will increase from 650 to 710 BGN. Despite the dissatisfaction of some businesses, the maximum insurance threshold is increased from BGN 3,000 to BGN 3,400.

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What else does the draft budget for this year envisage?

From April 1, the minimum wage will be BGN 710, announced Deputy Prime Minister and Minister of Finance Asen Vassilev. The maternity benefit in the second year is increased to this amount.

Pensions will be updated by 6.1% from July 1st, Vassilev said. Asked to comment on the dissatisfaction of some businesses against the increase of the maximum insurance threshold from BGN 3,000 to BGN 3,400, he replied:

“The maximum insurance income, as well as the minimum wage, must be in tandem with the average wage.”

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Economic growth budget - this is how the Minister of Finance presented the financial framework of the draft budget for 2022:

“Budget 2022 has three main focuses - increasing capital investment not only from the EU but also the national budget; significant increase in investment in people because it is the key to long-term economic growth; as well as social justice and ensuring an adequate standard of life of all citizens”, said Minister Vassilev.

With Budget 2022 Asen Vassilev wants to put a new approach to budgeting:

“With this budget, I hope to start a policy in which the state does not distribute money in a hat, does not distribute money in sacks, but invests - in projects with specific returns, in the people of Bulgaria and in the much-needed infrastructure.”

Here is how this approach sounds through some of the main parameters set in the draft budget for the year:

„In this budget of economic growth: is set GDP increase of 4.8%, which is 1.2% more than the growth this year, is set to reduce unemployment from 5.4% to 5%, and a deficit without Covid measures 2.5%, with Covid measures 4.1%. "

This is the cash deficit. On an accrual basis, the treasury deficit is just over three percent.

Regardless of the attitude towards the gross domestic product, in numbers, this means a deficit of BGN 5 billion and 900 million.

This year we are expected to withdraw 7 billion and 300 million levs of new debt.

“With three billion levs from it we will repay old debts, and the remaining 4 billion and 300 million levs will go to cover the deficit.”

The average annual inflation this year will be 5.6 percent. In the social policy from July 1, according to the Swiss rule, pensions will increase by 6.1 percent.

The minimum wage and maternity benefit in the second year become BGN 710.

Unemployment benefit is increased from BGN 12 to BGN 15 per day, and the maximum insurance threshold reaches BGN 3,400.

Education remains a key priority.

For the first time, funds will be allocated for a special program that will encourage student participation in sports competitions. Funds for health care are also provided, and payments for existing contracts are set for a number of items, such as vaccine contracts.

The same goes for the money for defense, explained Asen Vassilev, who reminded that the budget will be updated in the summer:

“Many of the policies that the government wants to pursue cannot be valued and set in this budget due to the short time, so we have an update in the middle of the year, where all policies will be valued and set in one size. This budget sets out policies that can be valued at the moment and that are key to the ministries concerned.”

The expenditures set in the draft budget are over BGN 63 billion and 153 million, and revenues - over BGN 57 billion and 250 million.

Asen Vassilev clarified that in the summer when there will be an update, there will be no thought of raising the deficit, which on a cash basis is 4.1% of gross domestic product.

Tax rates remain as they are at present. As it has been repeatedly emphasized, the tax on interest on savings will be abolished and there will be a restriction on the “weekend” tax, which cannot be abolished due to European requirements, Vassilev added.

By the end of the month, the draft budget will be submitted to the National Assembly for discussion, and the update will be in July.


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Tags: deficit, budget, wage, salary, benefits, BGN, asen vassilev


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