Bulgarian Cabinet approves draft 2016 Budget

Written by on October 30, 2015 in Bulgaria - Comments Off on Bulgarian Cabinet approves draft 2016 Budget

Bulgaria’s Government approved at a special meeting on October 30 the 2016 Budget bill drafted by the Finance Ministry, which also includes provisions revising the revenue and spending allocations for the 2015 Budget.

The bill envisions a consolidated fiscal programme – which includes the state Budget, local administration budgets, healthcare and pension funds – with total revenues of 33 billion leva, compared to 30.3 billion leva initially envisioned in this year’s budget (which have now been revised to 31.65 billion leva).

Total spending is set at 34.8 billion leva, compared to 32.82 billion leva in the 2015 Budget (now also revised upward to 34.5 billion leva).

The Budget deficit target in 2016 is set at two per cent of gross domestic product (GDP), while this year’s deficit is expected to rise to 3.3 per cent of GDP, exceeding the 2.9 per cent target set by the government, the Finance Ministry said in its three-year Budget forecast.

Economic growth is forecast at 2.1 per cent, while this year’s GDP target is increased to two per cent, from 1.4 per cent, following stronger-than-expected economic data in the first half of the year, the ministry said.

The bill envisions increasing the minimum salary to 420 leva on January 1, in line with commitments made in previous years. The three-year macroeconomic framework envisions another hike in 2017 (to 460 leva), but no further changes in 2018.

The draft budget raises the debt ceiling to 26.6 billion leva, or 2.1 billion leva higher than the figure this year’s Budget. At the same time, the government is allowed to issue up to 5.3 billion leva in new debt, compared to 8.1 billion leva this year.

(Bulgaria’s Council of Ministers building. Photo: Clive Leviev-Sawyer)

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