Slight improvement: Modest revenue growth shrinks the Bulgarian state budget gap

The Bulgarian budget deficit shrunk by almost 150 million euros in November, but it still remains high, according to the preliminary estimates of the Ministry of Finance (MoF) for the implementation of the consolidated fiscal program (CFP). According to the data, the deficit in the treasury at the end of November was 1.85 billion euros or 1.9% of GDP. For comparison - in the previous two months, the "hole" in the budget grew by more than half a billion euros, and in October it was almost 2 billion euros.

The main contribution to this (ed. - to the growth of revenues) is the more efficient collection of corporate taxes. By November 15, a large part of the taxpayers had submitted declarations for changes in the amount of advance payments under the Corporate Tax Act for the current year, and this raises significant amounts of revenue during that month," the Ministry of Finance explains.

In order to fulfill its commitment to join the eurozone, the Bulgarian government must keep the overspending to a maximum of 3.1 billion euros this year. Traditionally, however, many expenditures are made at the end of the year under the capital program, including road repairs, construction, etc.

As Economic.bg previously wrote, the fast-growing deficit puts the Bulgarian budget on track to mark its worst year in a decade, even compared to the pandemic 2020s when the state poured billions into support for people, businesses and the healthcare system.

Main parameters of the budget implementation in November

Revenues, benefits and donations under the Consolidated Fiscal Program as of November 2024 are expected to be in the amount of 33 billion euros, which is 86.7% of the annual estimates. Compared to a year earlier, revenues increased by 2.5 billion euros, or 8.5 percent, with tax and insurance revenues contributing to this, having increased in nominal terms by 2.8 billion euros.

Compared to 2023 non-tax revenues have decreased by 0.65 billion euros (12.5%), which is mainly due to lower revenue from dividends and from the sale of allowances for greenhouse gas emissions.

Expenditures under the CFP (including the contribution of the Republic of Bulgaria to the EU budget) as of November 2024 amount to 34.5 billion euros, which is 84.6% of the annual estimates.

Compared to the previous year, there was an increase mainly in social costs, as a result of the higher pensions paid after the increases that came into force in July 2023 and July 2024, as well as in personnel costs, after the increase in the remuneration of teaching staff and other civil servants", adds a statement from the Ministry of Finance.

The part of the contribution of the Republic of Bulgaria to the EU budget paid at the end of November amounts to 0.7 billion euros, which is in compliance with the currently effective EU legislation in that field.

Translated by Tzvetozar Vincent Iolov