Country's fiscal reserve dwindles, parties in dispute over Budget 2023

The fiscal reserve is melting, the budget revenues are decreasing, caretaker Finance Minister Rositsa Velkova said during a hearing in the National Assembly on May 12.

If no budget for 2023 is adopted by June 11, Bulgaria should move to a zero balance by June 12, she said. This would mean an abrupt halt in funding for the systems.

At the beginning of the year, the fiscal reserve stood at BGN 11.9 billion, of which BGN 10.8 billion were in BNB accounts. As of May 10, the fiscal reserve decreased to about BGN 10.3 billion and to BGN 9.6 billion in BNB accounts, caretaker Finance Minister said.

She explained the reduction of the reserve mainly with the pension costs, which are BGN 1.4 billion.

A drop in VAT revenues was also reported. As of 30 April, they amounted to BGN 4.9 billion, which is BGN 143 million less than in the same period in 2022.

"We have maximally strained the revenues in the part of tax and social security revenues. There are no reserves to achieve higher revenues that we have set out in the 2023 budget bill. Unless there is some change in the tax legislation, there are no reserves in the revenue part of the budget law," Rositsa Velkova pointed out.

The hearing of the caretaker Finance Minister in the plenary chamber seemed to have turned into a dress rehearsal of the budget discussion.

GERB-UDF blamed the government of Kiril Petkov for the poor financial situation. According to them, the only way out of the situation is to form a working cabinet that will keep the deficit to 3%.

"It is clear that the state of Bulgaria's public finances is extremely worrying at this point. We are witnessing a record budget deficit - 6.4%," said Temenuzhka Petkova of the GERB-UDF group.

“We Continue the Change-Democratic Bulgaria” said that there is no responsible fiscal and financial policy in Bulgaria.

"This draft budget with over 6% deficit is another attempt to intimidate the population. The submission of this butaphoric budget for consideration in the National Assembly is nothing more than a continuation of the lie about the bankrupt state," said Venko Sabrutev of WCC-DB.

"What strikes me is that somehow we don't have much statesmanlike thinking. We are trying to work piecemeal, patching up the budget," said Deyan Nikolov of “Vazrazhdane” group.

MRF again called for a quick formation of a government.

"Once again we appeal at the end of this hearing to make every effort to form a cabinet that will solve the political crisis and achieve budget consolidation," said Petar Chobanov.

According to BSP, Bulgaria can afford a higher budget deficit if it leads to economic development and an increase in the added value of Bulgarian industry.

"If we really have to take out these nearly 3 billion BGN in the possible activation of the recovery and resilience programmes, the fiscal reserve will come down to levels close to the critical ones," said Rumen Gechev of BSP for Bulgaria.

“There is Such a People” called for fulfilling the commitments that previous governments have made to society.

"Both goals are important - both to fulfil our stated policies towards the citizens, which are planned, and to get into the 3% deficit," said Grozdan Karadzhov of TISP.

The draft budget for 2023 has not yet been presented for discussion in the plenary chamber.