Bulgaria ends 2022 with 1.35B leva Budget deficit on cash basis

Bulgaria’s Finance Ministry said that the consolidated Budget deficit for the full year 2022 was 1.35 billion leva, on cash basis, or 0.8 per cent of the estimated gross domestic product, below the ministry’s 1.5 billion leva forecast issued last month.

The ministry said that the overall Budget deficit for 2022, as calculated under the European system of national and regional accounts (ESA 2010), was 2.9 per cent of GDP, but gave no figure in real terms or additional details about the discrepancy with the cash deficit.

The cash deficit in 2022 was significantly lower than in 2021, when Bulgaria ended the year with a deficit 3.91 billion leva, on cash basis.

The state Budget had a deficit of 5.09 billion leva and the EU funds recorded a surplus of 3.74 million leva, the ministry said. Bulgaria’s contribution to the EU budget in 2022 was 1.71 billion leva.

Revenue in 2022 was 64.77 billion leva, including 3.18 billion in windfall gains, which were not included in the 2022 Budget Act, the ministry said.

This additional revenue was the result of a one-off tax on windfall profits generated by companies in the energy sector due to high commodity prices, imposed to fund compensations to consumers affected by those high prices. The ministry’s figures showed a corresponding 3.18 billion leva in one-off spending.

Excluding those one-off gains, the total revenue in 2022 was 61.58 billion leva, an increase of 3.2 per cent over the target set in the revised 2022 Budget Act, the ministry said. Tax revenue was 46.79 billion leva, 1.5 per cent higher than the target.

In 2021, the total revenue reported by the Finance Ministry was 52.34 billion leva and tax revenues stood at 40.87 billion leva.

Budget spending was 66.11 billion leva in 2022. Excluding the one-off spending of 3.18 billion leva from windfall profits taxes, the Budget spending was 62.93 billion leva, or 4.5 per cent short of the amount targeted in the 2022 Budget Act revision.

The ministry said that the shortfall was due primarily to the slowdown in the utilisation of EU funds, both under the EU’s recovery and resilience facility, the centerpiece of the bloc’s Covid-19 recovery plan, as well as some operational programmes under the 2021-2027 EU multi-year budget.

The delay in the utilisation of those funds improved the cash balance for the 2022 Budget, but will put pressure on the 2023 Budget, the ministry said.

In 2021, Budget spending was 56.25 billion leva.

The Finance Ministry said that it expected a Budget surplus of 470 million leva in January 2023.

(Photo: Pedro Moura Pinheiro/flickr.com)

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