Twice lower deficit and modest 2.9% GDP growth projected in the 2012 draft budget

The budget for next year is similar to the one for 2011 but a twice lower deficit - 1.35% of GDP (below BGN 1.1 bn) and modest economic growth of 2.9% is projected. The draft fiscal plan published on the website of the Finance Ministry shows that the forecast for GDP growth has been revised downwards this year from 3.6% to 2.8%. More revenue and more expenditure have been projected. Revenues are expected to grow by 9.6% to BGN 28.73 bn and expenditures - by 5.9% to BGN 29.82 bn.

The 2012 draft budget was discussed today at a closed meeting of the Cabinet as PM Boyko Borissov promised on election night. On Thursday, the National Council for Tripartite Cooperation should approve it and, next Monday, it will be discussed again at an extraordinary Cabinet meeting. By law, the fiscal plan for next year should be submitted to Parliament by the end of October.

“In nominal terms, the 2012 budget is the same as the current one, with about BGN 20 mln less expenditures in order to achieve the goal of reducing the deficit each year,” said Finance Minister Simeon Djankov. According to him, the budgets of almost all ministries, except the Ministry of Culture and the Ministry of Education and Science, will remain unchanged in nominal value. The inflation rate is expected at slightly less than 2%. Djankov promised one more calculation of this indicator in November since it has fallen sharply across the EU over the last few months. The expectations for EU funds in 2012 are optimistic, estimated at BGN 3.82 bn, up from BGN 2.14 bn in 2011.

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