site.btaFinance Ministry Publishes 2018 State Budget Bill and 2018-2020 Budget Forecast

Sofia, October 23 (BTA) - Bulgaria's state budget in 2018 will be geared towards continuing the education reform, implementing measures in defence and security, supporting social and healthcare policies, and financing the Bulgarian Presidency of the Council of the European Union in the first half of the year. This is stipulated in the 2018 State Budget Bill which has been published on the Finance Ministry's website alongside an updated medium-term budget forecast for the period 2018-2020.

The proposed state budget for 2018 will provide support for teachers and incentives to attract young people to the teaching profession.

It will also provide resources to maintain and develop Bulgaria's national defence capabilities and those relevant to NATO's collective defence. This will include funding for the acquisition of military aviation equipment and modular multi-purpose patrol ships, as approved by the National Assembly. Expenses for defence and security personnel will be increased.

In the social sphere, the bill is aimed to increase the benefits for raising children between one and two years of age and to boost the minimum daily rate of unemployment benefits.

In the field of healthcare, the National Health Insurance Fund will be entitled to an additional 400 million leva in budgetary expenses.

The updated medium-term budget forecast for the period 2018-2020 is based on the assumption that the Bulgarian government will stay focused on preserving economic and financial stability and creating conditions for economic growth in accordance with the priorities, goals and measures set in the government's political programme for 2017-2021.

In the updated forecast, the projected deficit under the Consolidated Fiscal Programme remains unchanged from the spring version of the forecast. The deficit is projected at 1.0 per cent in 2018 and 0.5 per cent in 2019, which is expected to be followed by a balanced budget position in 2020. This will be achieved through moderate consolidation increments of 0.4 to 0.5 percentage points annually.

The government's income policy will be oriented towards maintaining economic growth, improving the business environment and promoting investment while keeping low corporate and personal income taxes, curbing tax fraud and enhancing macroeconomic and fiscal stability over the long term. The revenue side of the state budget is projected to decrease as a percentage of GDP, from 36.2 per cent in 2018 to 35.5 per cent in 2020.

According to the medium-term forecast, the minimum monthly wage in Bulgaria will increase from the current 460 leva to 510 leva as at January 1, 2018, and then to 560 leva as at January 1, 2019 and to 610 leva as at January 1, 2020.

In the field of pension policy, the period 2018-2020 will see a further increase of the pension entitlement age by 2 months for men and 1 month for women as of January 1 of every year. The contributory service required for pension entitlement will continue to increase by 2 months every year for both genders until it reaches 35 years and 10 months for women and 38 years and 10 months for men by the year 2020.

In 2018, the government will assume new domestic debt by selling state securities worth up to 1 billion leva. The money will go towards the repayment of 1.6 billion leva in national debt, including 1.2 billion leva for maturing government securities on the domestic market and 400 million leva for external loan repayments. The remaining 600 million leva of the necessary amount will be raised through savings on government deficit financing, as the state budget in 2017 is expected to be in a balanced position.

The ratio of the government debt to the projected GDP is expected to fall between 2018 and 2020. By the end of the period, the government debt will stand at 23.8 billion leva, or 20 per cent of GDP. This will be possible thanks to the improving budgetary position of the country.