Ministry of Finance of the Republic of Bulgaria

04/04/2023 | Press release | Distributed by Public on 04/04/2023 08:45

The balance of the Consolidated Fiscal Programme for the first quarter of 2023 is deficit, amounting to approximately BGN 690 million

Based on preliminary data and estimates the budget balance of the Consolidated Fiscal Programme (CFP) as of end-March 2023 is expected to be deficit, amounting to BGN 690 million (0.4 % of the forecast GDP). For comparison, a surplus of BGN 294.7 million was reported for the first quarter of 2022, which means that on an annual basis the budget balance for the period has deteriorated by around BGN 1 billion. The trend from the first two months of the year is continuing - expenditures growth (almost 27 per cent) significantly outpaces revenue growth (18 per cent) which is the main reason for the deterioration of the budget position compared to the previous year.

Key CFP parameters on the basis of preliminary data and estimates:

As of March 2023, CFP revenues, grants and donations are expected to be BGN 14,643 million, increasing by BGN 2,260 million (18.2 per cent) compared to those reported for the first quarter of 2022. Compared to the same period of 2022, tax and non-tax proceeds under CFP rise by BGN 2,322 million in nominal terms, while proceeds from grants and donations (mostly EU programme and fund grants) are by BGN 62 million less as compared to the amount reported for the same period of the previous year.

Based on preliminary estimates, CFP tax revenues for the first quarter of 2023 are to the amount of around BGN 11,861 million, increasing by 20.1 % in nominal terms as compared to the same period of the previous year. The main factors influencing the implementation of indirect taxes, especially VAT revenues for the period, are as follows: the dynamics of domestic consumption, imports and exports, as well as revenue administrations' measures to increase revenue collection. According to preliminary data, the VAT amount for the period declared for payment has increased by 13.8 % compared to the first quarter of the previous year. VAT receipts from imports during the period have been influenced by the 3.5 % increase in the index of prices of goods imported from third countries. On the other hand, the VAT amount declared for refunding has increased by 18.9 %. The main reason for the high VAT amount declared for refunding is the increase in the declared tax credit by exporters (19.2 %). In addition, since the beginning of 2023, there has been a decrease of 10.3 % in the quantities of goods imported from third countries, including a decrease in the quantities of imported crude oil. VAT revenues are also negatively affected by the reduced rates of some goods as from 1 July 2022, including the 9% VAT rate for central heating and natural gas, the 0% VAT rate for bread and flour, as well as by the increase in the VAT registration threshold to BGN 100 thousand as from 01.01.2023.

The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, as of March 2023 amount to BGN 15,333 million. For comparison, CFP expenditures as of March 2022 amounted to BGN 12,089 million. The most significant increase in the individual expenditure indicators is recorded in terms of pension expenditures, as well as in the part of subsidies, maintenance and staff expenditures, etc.

The part of Republic of Bulgaria's contribution to the EU budget, paid from the central budget as of 31 March 2023, amounts to BGN 55 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 March 2023 will be published on the website of the Ministry of Finance at the end of April 2023.