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GERB will leave a budget deficit of BGN 5.2 billion by 2020 and more BGN 4.9 billion by 2021, that is, a total of more than 10 billion BGN for the crisis years 2020 and 2021.
This is clear from the official government projects for the update of the 2020 Budget and the 2021 Budget, published by the Ministry of Finance.
Thus, the state budget for this year is growing at 49 billion BGN, and for next year – in more than 52 billion BGN
Source: Ministry of Finance
Due to the extraordinary social spending declared anti-crisis due to the Covid-19 pandemic, the public debt is expected to reach almost 40 billion BGN (more precisely BGN 38.9 billion) by the end of 2023, given that after 2021 future governments will eliminate a large part of the social benefits distributed by Boyko Borissov such as child benefits for all, food for pensioners, etc. north.
By the end of this year, the debt will reach 28 billion BGN (23.5% of GDP), which includes the 5 billion BGN withdrawn from the cabinet in September through issues on international markets.
With the preliminary draft budget for next year, the government proposes second update of this year’s state financial plan. Once updated in April, when a deficit of BGN 3.5 billion was established, it now rises to BGN 5.2 billion (4.4% of GDP).
The reason for the “hole” increase is non-tax revenue breach (for BGN 900 million), as much as increased expenses (by BGN 840 million). For example, the anticipated 660 million BGN of the concession fee at Sofia airport as well as the 260 million BGN of the toll system will not be included in the 2020 budget. At the same time, the budget will allocate an unforeseen BGN 766 million for various payments from the regional ministry budget.
It seems that the government will be able to collect updated tax and social security revenue in April – BGN 34.9 billion No additional lag is expected in the two most important taxes, VAT and excise duties, of which BGN 10.6 billion and BGN 5.5 billion should enter the budget by the end of the year, respectively.
Budget 2021, which in practice will be implemented by a new government, is also estimated at a huge deficit – 4.9 billion BGN (3.9% of GDP). And this in the context of an ambitious plan for next year’s revenues, which are forecast to exceed BGN 2 billion more than this year, as the depth of the crisis is not yet clear.
Source: Ministry of Finance
Cabinet priorities remain the same as in all previous Borisov 3 cabinet budgets: education, health, welfare and defense. The essential difference, however, is that this time, with the explanation of the Covid crisis, the dumping of money in the social sphere as an absolute amount is much higher, which many commentators interpret as an electoral campaign.
Source: Ministry of Finance
The government is setting a projected deficit for 2022 and 2023, amid the elimination of many of the extraordinary social benefits due to Covid-19. For example, it is planned to return the income criteria for child benefits from 2022, which will again significantly reduce the number of children who receive them. It is estimated that in 2020 572 thousand children will receive benefits. Next year they will increase to 1.26 million, while in 2022 children eligible for assistance will decrease to 491 thousand due to parental income.
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