MINISTRY OF FINANCE EXPECTS SURPLUS OF BGN 163.5 MILLION UNDER THE CONSOLIDATED FISCAL PROGRAMME FOR 2018
The preliminary data and estimates expect for the Consolidated Fiscal Programme (CFP) balance on a cash basis for 2018 to be positive, amounting to BGN 163.5 million, or 0.2% of the projected GDP. For a third consecutive year the Consolidated Fiscal Programme reports a surplus, which ensures flexibility with government debt management and fiscal buffer maintenance. Bulgaria strengthens its position of being among the EU Member States with the lowest general government debt-to GDP ratio and it is envisaged that in the medium term this indicator will continue dropping throughout the entire period ending in 2021.
Compared to the objective set in the estimates to the 2018 State Budget of the Republic of Bulgaria Law, the CFP balance reports an improvement by almost BGN 1.3 billion in nominal terms. Bulgaria’s strong fiscal performance has also been reflected in the annual reports of the international rating agencies, with the analysts specifying that the financial stability, the low government debt and joining the ERM II will further enhance the trust in the country and will be a factor for rating upgrade.
Key CFP parameters based on preliminary data and estimates:
The 2018 CFP revenues and grants are expected to be BGN 39,644.3 million, (103.7% of the annual estimate), registering a growth by BGN 4,327.6 million as against 2017. The growth in comparison to the previous year is mainly due to the higher tax and non-tax revenues which grow by BGN 3,748.8 million, or by 11.1%. Grants also report an increase by BGN 578.8 million.
The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, amount to BGN 39,480.8 million for 2018, which accounts for 100.4% of the annual estimates. The nominal increase in expenditures compared to the previous year is due both to the higher national budget expenditures and to the increasing expenditures under the European Union fund accounts. The growth of national budget expenditures is mainly due to the higher amount of health insurance and social payments (a baseline effect for pension expenditures as a result of the increase in July 2017, the two-step increase in the minimum pension in 2017 as from July and October, as well as the new increase in pensions as from July 2018), the higher staff costs mostly resulting from the increase in the remuneration of pedagogical staff within the system of secondary education, etc., while it is capital expenditures under EU fund accounts that are mostly growing.
The part of Bulgaria’s contribution to the EU budget, as paid from the central budget as of 31.12.2018, amounts to BGN 1,083.4 million, which complies with the existing legislation in the area of EU own resources, i.e. Council Decision 2014/335/EU on the system of own resources of the European Union, Council Regulation (EU, Euratom) No 608/2014 of 26 May 2014 laying down implementing measures for the system of own resources of the European Union and Council Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements, as amended by Council Regulation (EU, Euratom) 2016/804 of 17 May 2016.
The statistical data and the Information Bulletin on the Execution of the State Budget and the key Consolidate Fiscal Programme indicators based on the monthly data on cash execution of first-level spending units for 2018 will be published on the website of the Ministry of Finance at the end of January 2019.