site.btaGovernment Approves 2021 State Budget Bill

October 28 (BTA) - The Council of Ministers approved the Bulgaria 2021 State Budget Bill and the updated medium-term budget forecast for the 2021-2023 period, which provides the reasoning for the bill, the press service of the Cabinet said on Wednesday.

Revenues for the period 2021-2023, expressed as a percentage of GDP, are forecast to decrease from 38.3 per cent to 37.6 per cent, while in nominal terms they are expected to increase from 47,645.2 million leva in 2021 to 52,423.8 million leva in 2023. Expenditures for the 2020-2022 period are forecast to decrease as a percentage of GDP from 42,2 per cent to 39,6 per cent, and have a major consolidation contribution to achieving the goals of the budget balance. In nominal terms, the expenditures are expected to increase from 52,532.2 million leva for 2021 to 54,963.8 million leva in 2023. The main indicators show a trend of nominal increase in both revenues and expenditures, provided that expenditures in 2020 and 2021, related to overcoming the negative effects of the pandemic, are excluded.

The deficit under the Consolidated Fiscal Programme (on a cash basis) shows a decreasing trend from 4.4 per cent of GDP in 2020 (revised estimate) to 1.8 per cent of GDP in 2023. If the effect of the temporary COVID-19 measures envisaged for 2020 and 2021 is excluded from the scope of the budget balance, the deficit remains within the limit of the national fiscal rules, varying between 1.5 and 2 per cent of GDP.

Provided that the pandemic situation deteriorates significantly in 2021, leading to the need for emergency provision of treatment-related resources, it is envisaged that 5 per cent of the expenditures and transfers provided to part of the primary budget managers, as well as subsidies and capital transfers from the central budget will go to pandemic relief efforts. This is done in order to provide a resource for contingency expenditures related to the purchase of medicines, equipment, protective equipment, disinfectants, construction of additional beds, providing medical teams, etc.

In the field of tax policy in the medium term it is envisaged to maintain the main priorities related to improving the collection of revenues, dealing with the gray economy and reducing the administrative burden and costs for businesses and citizens.

The priorities of Budget 2021 are income policy, education, health policy, social and pension policy and defence policy.

The updated medium-term budget forecast for the 2021-2023 envisages an increase in the amount of minimum wage to 650 leva from January 1, and maintaining that amount throughout 2022 and 2023.

In 2021, funds for remuneration of pedagogical specialists will be doubled compared to 2017, and a total of 360 million leva will be allocated for this and for education and training activities of children and students, with 57.8 million leva specifically intended for non-teaching staff. In 2021, year-long remuneration funds are planned out for a 30 per cent increase in the salaries of authorities and administration staff in charge of pandemic control activities, including front line employees which are included in the government's socio-economic package.

The 2021 State Budget Bill also provides for an increase of 10 per cent in the funds for salaries and wages of staff employed under labour and official legal relations, including the funds for social security contributions, for all structures that do not fall within the scope of the package of socio-economic measures of the government. An increase in the funds for salaries and remunerations of staff in elected positions and for judiciary employees, for which the remuneration mechanism is legally regulated, is also planned for in the budget.

Additional funds have been provided in the 2021 State Budget as follows: 474 million leva for increasing the minimum pension amount from 250 leva to 300 leva, as of January 1, 2021; 94 million leva for increasing the maximum pension amount from 1,200 leva to 1,440 leva, as of January 1, 2021; 884.2 million leva for measures related to the modernization and calculation of pensions, including for year-round payment of the pensions increased by 6.7 per cent from July 1, 2020, as well as a new 5 per cent pension update from July 1, 2021; 318 million leva for payment of pension supplements to all pensioners until March 2021.

At the end of the period, the Ministry of Finance expects government debt to reach 38.9 billion leva, and the ratio of government debt to GDP to increase from 25.6 per cent by the end of 2021, to 28.2 per cent at the end of 2023. RI/DT

/DT/