The Ministry of Finance expects negative budget balance of the Consolidated Fiscal Programme as of end-May 2021
Based on preliminary data and estimates the budget balance of the Consolidated Fiscal Programme (CFP) as of May 2021 is expected to be negative, amounting to BGN 173 million (0.1 % of the forecast GDP).
Key CFP parameters on the basis of preliminary data and estimates:
As of May 2021, CFP revenues, grants and donations are expected to be BGN 20,452.8 million (43.0% of the annual estimates), showing growth of almost BGN 2.8 billion as compared to the first five months of 2020; the major contributors for that are the higher tax and non-tax revenues which have risen by BGN 3.1 billion, while proceeds from grants have decreased by BGN 0.3 billion. In the area of tax revenues, their significant growth in May is mainly due to a baseline effect in April and May 2020 – the period of the strictest containment measures and restrictions. The trend of a gradual recovery of the key taxes, as evident from the previous months, has continued. Significant growth on a monthly basis compared to the same month of the previous year is reported in revenues from VAT, personal income tax, social security contributions, etc. Proceeds from excise duties have already overcome the delay from the first months of the year and the proceeds in this group exceed those reported for the first five months of 2020.
The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, as of May 2021 are expected to amount to BGN 20,625.8 million, which accounts for 39.3 % of the annual estimates. For comparison, the expenditures under the CFP for the same period of 2020 amounted to BGN 16,323.4 million. The significant growth of expenditures in the first five months of 2021 compared to the same period of the previous year is related, on the one hand, to the lower base in 2020 when the expenditures on addressing the COVID-19 pandemic were significantly lower, while as of May 2021 these expenditures are significant, and, on the other hand, to the income policy, the policies in the social sphere and the higher expenditures on the administration laid down in the 2021 State Budget of the Republic of Bulgaria Law.
Considered by economic elements, the most significant increase is reported in social and health insurance expenditures. In the area ofpension expenditures, nearly BGN 526 million were spent on payment of an allowance of BGN 50 to the pensions of all pensioners for the months from January to May. In addition, pension expenditures were also influenced by the increase in the amount of the minimum contributory-service and retirement-age pension and of the maximum amount of the pension as from the beginning of the year, as well as by a baseline effect of the increase in pensions in July 2020. In the area of health insurance expenditures, these report an increase related to higher expenditures on tackling the pandemic and arrangements for financing health establishments in the context of the emergency epidemic situation, including expenditures on medicines, tests, consumables and protective equipment, funds to support front-line staff in the fight against COVID-19 (supplementary monthly remuneration of BGN 1,000), payment to medical staff for vaccination of the population against COVID-19, monthly allowance of BGN 600 for doctors, BGN 360 for nurses and midwives and BGN 120 for hospital attendants, etc. The payments under the 60/40 measure, the 80/20 measure, the “Keep Me” measure, the “Working Capital Support For SMEs Affected by the Temporary Anti-Epidemic Measures” measure administered by the NRA, etc., have contributed to the growing expenditures on subsidies for non-financial enterprises. Capital expenditures have also increased in comparison to the same period of the previous year, which is due to payments related to investment projects of the Bulgarian army, road infrastructure sites, etc.
The part of Republic of Bulgaria's contribution to the EU budget, paid from the central budget as of May 2021, amounts to BGN 683.2 million, which complies with the current legislation in the area of EU own resources.
The statistical data and the Information Bulletin on the execution of the state budget and the key indicators of the Consolidated Fiscal Programme based on data from the monthly reports on the cash performance of the budgets of the first-level spending units as of May 2021 will be published on the website of the Ministry of Finance at the end of June 2021.