Bulgaria's general government spent BGN 168.2mn (EUR 86mn) more than it received in revenue in Jan-Jul 2013, resulting in a consolidated budget deficit equal to 0.2% of the full-year GDP projection, according to finance ministry data. In the same period of 2012, the budget posted a BGN 200.3mn surplus. Expenditures (including Bulgaria's contribution to the EU) grew 9% y/y to BGN 16.7bn in the first seven months of this year, while revenue rose at a slower rate - by 6.5% y/y to BGN 16.6bn.
The state's total current spending rose 9.4% y/y to BGN 14.5bn in Jan-Jul 2013. Among its major categories, arrears on wages were up 9.4% y/y to BGN 2.5bn, while expenses on social and health-care benefits climbed 31.5% y/y to BGN 783mn likely on the back of a higher number of public-sector employees (some 14,000 more as of June, according to statistics office data) and higher social insurance thresholds in 2013 compared to 2012. Furthermore, spending on education, grants, scholarships and welfare benefits grew 6.5% y/y to BGN 7.3bn. Capital outlays rose only 2.1% y/y to BGN 1.6bn.
The state's tax proceeds grew 3.5% y/y to BGN 12.8bn and non-tax revenue increased 7.6% y/y to BGN 2.4bn.
In August, the parliament passed a law revising this year's budget deficit target to 2%/GDP from 1.3%/GDP, based in part on the estimate that revenue collection will fall short of the original projection by BGN 207.4mn. The latest data show that if the Jan-Jul average monthly growth in revenue is maintained, revenue will fall short of the non-revised estimate by around BGN 103mn. We note that the new law also increased this year's expected state expenditures by BGN 286mn.
Bulgaria had one of the smallest budget deficits in the EU in 2012. The country's general government deficit amounted to BGN 350mn (EUR 179mn) at end-2012, or 0.5% of that year's GDP.
|Bulgaria's consolidated govt budget,BGN mn||Jan-Jul'12||Jan-Jul'13||Change, y-y||Change, y/y|
|Revenues and grants||15,598.2||16,609.9||1,011.6||6.5%|
|- Tax revenue||12,422.1||12,852.2||430.1||3.5%|
|- Non-tax revenue||2,252.6||2,424.3||171.7||7.6%|
|- Wages and salaries||2,298.9||2,514.1||215.3||9.4%|
|- Social and health insurance contributions||595.5||782.9||187.4||31.5%|
|- Social expenditure, scholarships||6,878.3||7,324.4||446.2||6.5%|
|- Capital expenditure and net state reserve gain||1,607.1||1,641.3||34.3||2.1%|
|Contribution to the EU budget||503.7||605.2||101.5||20.1%|
|Source: Finance ministry|
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