site.btaGovernment Approves Proposed Update of 2014 National Budget, National Health Insurance Fund's Budget

Government Approves Proposed
Update of 2014 National Budget,
National Health Insurance Fund's Budget


Sofia, October 1 (BTA) - The Government Wednesday approved the
proposed update of the 2014 national budget and of the budget of
the National Health Insurance Fund (NHIF), Finance Minister
Roumen Porozhanov told journalists at the Council of Ministers'
building.

The updated forecasts for the revenues in the national budget
envisage a non-implementation of the parametres planned in the
2014 National Budget of the Republic of Bulgaria Act of 1,061.8
million leva (1.3 per cent of the expected GDP), which is
reflected in the draft amendments.

The draft update envisages a worsening of the national budget's
balance by 1,510.3 million leva (1.9 per cent of the expected
GDP) compared to the estimates under the 2014 National Budget
Act, with which the deficit becomes 2,846.5 million leva (3.6
per cent of the expected GDP).

Also envisaged is a worsening of the annual forecast for the
deficit on a cash basis under the Consolidated Fiscal Programme
(CFP) of up to 4 per cent of the expected GDP (3,152.3 million
leva), the Council of Ministers' decision reads.

The draft update was discussed at an operational meeting of the
Cabinet on Saturday and was then discussed with economists and
financial experts at the start of this week. A meeting was held
with GERB, the Reformist Bloc and Bulgaria without Censorship on
Tuesday. The Bulgarian Socialist Party refused to attend the
meeting, and the Movement for Rights and Freedoms requested the
postponement of the talks after Friday, due to the
party's elections-related tasks, Porozhanov said.

Wednesday's debate with the trade unions and employers was
extremely useful, he told journalists. "We do not have
significant differences with them in terms of way of thinking,
but our expert assessment is more conservative," he said.

Aside from the national budget, there is serious tension in
other budget systems, which additionally aggravates the forecast
for the deficit under the 2014 CFP. The expected worsening is
expected mainly in the accounts for EU resources of the National
Fund and the NHIF budget.

In the context of the proposed deficit increase and the
provision of a reliable buffer for liquid support, there is a
need of a new national debt and, respectively, a change in the
expected debt limits for 2014, which would allow an additional
debt financing to the amount of 4.5 billion leva within this
year. An increase of up to 22.5 billion leva (28.4 per cent of
the expected GDP) is envisaged in the permissible maximum amount
of the government debt towards this year's end.

An increase by 2 billion leva is planned in the maximum amount
of the new state guarantees which can be issued during the year.
This is related to the planned option of issuing state
guarantees in favour of the Bank Deposit Guarantee Fund.

The Government also approved a draft act amending and
supplementing the 2014 NHIF Budget Act aimed at providing an
additional sum of 100 million leva for health insurance
contributions for chargeable medical assistance in 2014.
The resources will be covered with the 100,248,000 leva
available in the NHIF budget account at the start of 2014.
In order to compensate the over-expenditure and to guarantee the
system's financial stability, additional measures will be taken
in relation to the NHIF's control mechanisms, as well as
measures for limiting the expenditures for medicinal products,
the Council of Minister's press release reads.

PK/DS