Bulgaria’s Government approved the 2023 draft Budget package late on July 5 and has tabled it in Parliament, where the budget and finance committee was due to discuss it at a sitting on July 6.
Normally Bulgaria’s Parliament approves a Budget before the start of that year, but the previous 48th National Assembly failed to elect a government and had to extend the duration of the provisions of the 2022 Budget Act.
Bulgaria’s caretaker Cabinet approved a draft Budget in April, but the current legislature, elected in April, opted not to discuss that bill, instead extending the provisions of last year’s Budget for a second time, until July 31.
Assen Vassilev, returning for a third stint as Finance Minister in the Nikolai Denkov government, had previously criticised the caretaker cabinet’s bill and vowed to table a more balanced Budget.
Vassilev’s bill targets a Budget deficit of three per cent, significantly lower than the 6.4 per cent envisioned in the caretaker Cabinet’s bill. The cash deficit of the consolidated fiscal programme – which includes the state Budget, local administration budgets, healthcare and pension funds – is set at 2.5 per cent.
In 2022, Bulgaria had an overall Budget deficit of 2.9 per cent and a cash deficit of 0.8 per cent.
The Budget package envisions a consolidated fiscal programme with revenues of 69.5 billion leva and 74.1 billion leva in spending, with the deficit estimated at 4.6 billion leva in real terms.
In its earlier bill, the caretaker cabinet budgeted revenues of 65.8 billion leva and 77.7 billion in spending, with a deficit of 11.9 billion leva in real terms.
Regarding the 3.6 billion leva cut in spending, the government’s media office said that the bulk of it was maintenance and repair expenditures that were “no longer necessary” and a reduction in capital spending for projects that were not expected to begin this year.
Vassilev said that his draft Budget made no cuts to spending on social programmes compared to the caretaker Cabinet’s bill and said that the increased revenue target was a reflection of increased domestic consumption.
The economic growth target remains unchanged at 1.8 per cent, compared to 1.5 per cent projected by the European Commission in its spring forecast.
The draft budget sets the debt ceiling at 40.6 billion leva, or 22 per cent of projected GDP (up from 21.8 per cent in 2022), with the government allowed to issue 7.5 billion leva in new debt in 2023.
The caretaker cabinet’s bill had planned to raise the debt ceiling at 46.8 billion leva, or 25.3 per cent of projected GDP, with 13.7 billion leva in new debt in 2023.
(Bulgaria’s Council of Ministers building. Photo: government.bg)
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