site.btaBulgaria Incurs 1.3 Billion Leva Deficit under Its Consolidated Fiscal Programme between January and August 2014

Bulgaria Incurs 1.3 Billion Leva Deficit under Its Consolidated Fiscal Programme
between January and August 2014

Sofia, October 1 (BTA) - The budget balance under Bulgaria's
Consolidated Fiscal Programme (CFP) was minus 1,275,600,000 leva
on a cash basis as at August 31, 2014, the Finance Ministry
reported on Wednesday. This resulted from a national budget
deficit of 710,900,000 leva and an EU funding-related deficit of
564,700,000 leva.

The country's fiscal reserve stood at 8.7 billion leva as at
August 31, 2014. This included 8.2 billion leva in fiscal
reserve deposits at the central bank and other banks and 0.5
billion leva in EU funds receivables towards certified expenses,
advance payments etc.

The CFP deficit was due mainly to the fact that expenses were
growing faster than revenues and tax collection went slower than
projected. The government continued to finance Operational
Programme Environment and two axes of Operational Programme
Regional Development, although refunds from the European
Commission had been suspended. Bulgaria expects to be reimbursed
for the expenses certified under the two programmes after EU
funding is resumed. The CFP deficit increased by 1,062,900,000
leva compared with August 31, 2013, when it was just 212,700,000
leva.

Revenues and aid received under CFP between January and August
2014 amounted to 19,215,100,000 leva, which accounted for 61.9
per cent of the annual target. Compared with January-August
2013, revenues increased by 1.2 per cent (218,700,000 leva) in
nominal terms, which compares with a projected annual increase
of 7.1 per cent (2,100,000,000 leva).

Tax revenues, inclusive of social and health insurance
contributions, collected over the eight-month period stood at
15,122,600,000 leva, which was 62.2 per cent of the annual
target. This compares with 64.4 per cent recorded in the like
period of last year. Tax revenues in the reporting period
increased by 405,500,000 leva (2.8 per cent) in nominal terms,
but the increase was considerably slower than the projected
annual rate of 8.8 per cent.

Non-tax revenues and aid received between January and August
2014 totalled 4,092,500,000 leva, which was 61.0 per cent of the
annual plan. This implies a decrease by 243,500,000 leva (9.1
per cent) compared with January-August 2013. The decrease was
mainly due to lower revenues on property, which is partly
explained by the fact that some of the revenues on property
earned in 2013 had been one-off payments. The amount of aid
received over the reporting period increased by 3.5 per cent
(56,700,000 leva).

Expenses incurred under CFP between January and August 2014,
inclusive of Bulgaria's contribution to the EU budget, amounted
to 20,490,700,000 leva, which made up 63.0 per cent of the
annual projection. Compared with January-August 2013, expenses
went up by 1,281,600,000 leva (6.7 per cent), which resulted
primarily from a rise in national expenses for EU-supported
projects and an increase in social and health insurance
payments.

National expenses for EU-supported projects (such as national
co-financing) rose by 40.2 per cent (754,700,000 leva) compared
with a year earlier, and national budget expenses rose by 3.2
per cent (538,800,000 leva). Social expenses grew mainly because
of the base effect of an April 1, 2013 increase of pensions and
larger health insurance payments in the first months of 2014,
some of which went towards obligations incurred in 2013.

Non-interest expenses totalled 19,349,500,000 leva, which was
64.9 per cent of the annual target. Current non-interest
expenses amounted to 16,790,200,000 leva, making up 67.7 per
cent of the annual projection, and capital expenses (inclusive
of the net growth of the state reserve) amounted to
2,559,300,000 leva, making up 51.2 per cent of the annual
target. Interest expenses totalled 478,400,000 leva, or 71.4 per
cent of the annual plan.

Between January and August 2014, Bulgaria contributed
662,800,000 leva from its central executive budget to the EU
budget.