Bulgaria’s government proposes budget update, increase in debt ceiling

The Bulgarian government on March 30 proposed a budget update because of the coronavirus crisis.

Due to the emergency measures and consequences for the Bulgarian economy, the cabinet proposes that the National Assembly vote on a budget deficit for this year of 2.9% of GDP, or BGN 3.5 billion.

The Cabinet proposes to increase the ceiling for taking on new government debt from 2.2 to BGN 10 billion.

The reason for the update is the expected non-fulfillment of the tax and social security revenues for this year of BGN 2.44 billion, non-fulfillment of the State Social Security revenues to the amount of BGN 430 million.

BGN 700 million - for the Bulgarian Development Bank for government guaranteed business loans, and BGN 2.4 billion for the 60 to 40 scheme ( The payment of compensations to employers for the purpose of keeping their staff employed under the state of emergency. The compensation amounts to 60% of the contributory income for January 2020 and is for the benefit of each employee who is laid off or transferred to reduced working hours.)

Among the reasons for the requested update, the Cabinet also said that it is expected that domestic consumption will decrease, exports and imports will shrink, and employment will be lower.

Finance Minister Vladislav Goranov will give a briefing tomorrow with more details.