The budget balance of the Consolidated Fiscal Programme for the first half of 2020 deteriorates by BGN 1,7 billion as compared to the same period of 2019
Based on the preliminary data and estimates, as of June 2020, the excess of revenues over expenditures under the Consolidated Fiscal Programme (CFP) is expected to amount to BGN 1,564.6 million (1.3 % of the forecast GDP). For comparison, the reported excess of revenues over expenditures for the first half of 2019 amounted to BGN 3,223.3 million (2.7 % of GDP), which means that, as compared to the same period of 2019, the budget balance has deteriorated by BGN 1.7 billion in nominal terms.
As of June 2020, CFP revenues, grants and donations are expected to be 48.2 percent of the updated annual estimates. Compared to the same period of the previous year, revenues are slowing down which is due to the negative implications on proceeds from most key taxes as a result of the limitations in response to COVID-19 in Bulgaria and worldwide.
The performance of the updated annual estimates in the part of CFP expenditures for the first half of year is expected to be 41.4 percent. The lower utilisation of expenditures compared to the performance of revenues is the reason for the current excess of revenues over expenditures for the first half of the year. Despite extraordinary expenditures, including ones financed by EU programmes, routine expenditures have registered lower utilisation which results from the fact that budgetary organisations have carefully fine-tuned, prioritised and sparingly utilised the resources.
On the other hand, it is important to note that the works on and the implementation of large infrastructure and investment projects are continuing. The employment support measure (known as 60/40) is expected to be redefined and extended in scope, and at this stage the plans are the measure to continue to apply until end-September. In the second half of the year, the indexation of pensions, laid down in the annual estimates, will also be applied. This will be reflected in an increase in expenditures in the second half of the year. The expenditures related to the measures to overcome the impact of the pandemic also continue.
Key CFP parameters on the basis of preliminary data and estimates:
As of June 2020, CFP revenues, grants and donations are expected to be BGN 21,386.5 million (48.2 % of the updated annual estimates). Compared to the same period of 2019, as of June 2020, tax and non-tax revenues under the Consolidated Fiscal Programme contract by BGN 1,316.6 million, while proceeds from grants increase by BGN 417.3 million.
The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, as of June 2020 amount to BGN 19,821.9 million, which is 41.4 % of the updated annual estimates. For comparison, the expenditures under the CFP as of end-June 2019 amounted to BGN 19,062.5 million. As compared to the same period of the previous year, there is a nominal increase mainly in terms of social security and health insurance payments, staff costs, etc.
The part of Bulgaria's contribution to the EU budget, paid from the central budget as of 30.06.2020, amounts to BGN 688.6 million, which complies with the current legislation in the area of EU own resources – Council Decision 2014/335/EU, Euratom 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) No 2016/804 of 17 May 2016.
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 June 2020 will be published on the website of the Ministry of Finance at the end of July 2020.