November 19, 2008

The first reading of the draft budget for 2009 bill was passed with the votes of 132 deputies, 73 voted against and 3 abstained.
The draft budget provides for more money for investment in infrastructure, social spending, education and health care. Education allocations increase by 14.3 per cent compared to the outlays in 2008, while health care gets an increase of 18.1 per cent of its allocations for 2008.

Budget revenue in 2009 is set at 32,556,300,000 leva, 19.7 per cent more than in 2008. Expenditure in the consolidated fiscal programme is set at 29,430,200,000 leva, 19.1 per cent more than in 2008.

The key instruments for keeping up the macroeconomic parameters include a ceiling for consolidated expenses at up to 40 per cent of the Gross Domestic Product (GDP) and budget surplus of no less than 3 per cent of the GDP. The economic growth target is set at 4.7 per cent, foreign direct investment at some 5.3 billion euro, year-end inflation at 5.4 per cent and the period's average at 6.7 per cent.

Capital outlays are set at 5,200 million leva, up by 20.9 per cent the figure for 2008. An additional investment programme is to be implemented with resources from the planned reserve for public investment to the amount of up to 400 million leva.
Subsidies, including money from the EU in the form of grant aid, are set at 1,828.8 million leva.

A decision has been made to up the capital of the Bulgarian Development Bank and of the FLAG fund supporting municipalities in the designing and implementation of EU-funded projects, and to increase the credit ceiling of the Bulgarian Export Insurance Agency.

The draft budget includes a package of measures aimed to encourage the national economy, and several buffers to soften possible adverse effects on the enterprise sector from the world financial crunch. The focus of these is on increasing economic activity, market flexibility and the flexibility of social nets.

Pensions will be increased twice next year, as of April 1 and July 1. After the first step the maximum pension will go up to 700 leva (from 490 leva in 2008) and the minimum to 124.84 leva (from 113.49 leva in 2008). These will go up by another 9.7 per cent as of July 1.
Budget-financed wages will increase by 10 per cent from July 1 and the minimum wage will be set at 240 leva (from 220 leva).
The benefits for children that parents are entitled to, will be increased to 35 leva (from 25 leva).
The revenue of the budget of the Supreme Judicial Council is set at a little over 86 million leva, including legal fees, while the spending target is 438,323,000 leva, of which 428 million leva in operating costs and 9.4 million leva in capital outlays.