/ world today news/ Education, healthcare, a modern and combat-ready army – these are the main priorities of the 2017 Budget, the draft of which was announced today by the Ministry of Finance.
In the published draft law on the state budget of the Republic of Bulgaria for 2017 and the updated medium-term budget forecast for the period 2017-2019, which represents the reasons for it, it is written that the expectations for real GDP growth are to remain relatively stable levels during the forecast period, and in 2017 it will slightly slow down to 2.5%, and for the period 2018-2019 its gradual acceleration to 2.7% is expected. Domestic demand will lead growth in both consumption and investment.
Taking into account the one-off effect on the budget balance for 2016, the current forecast maintains the deficit targets for the period 2017-2019 of 1.4%, 1.0% and 0.5% of GDP, respectively, set in the spring medium-term budget forecast.
Incomes, benefits and donations under the CFP for the period 2017-2019 range between 38.4% and 37.7% of GDP. The slight downward trend over the years, with an expected increase in 2017 compared to the expected revenue performance for 2016, is a result of measures to increase tax revenue collection, changes in social security policy and transfer of non-tax revenue for 2017 included in the 2016 program.
In the medium term, total CFP expenditure shows a downward trend from 39.8% of GDP in 2017 to 38.2% of GDP in 2019.
The main goal in the period 2017-2019 is the implementation of a tax policy aimed at increasing budget revenues and reducing the share of the shadow economy. A policy of maintaining low levels of direct taxes and transferring the tax burden from direct to indirect taxes is followed. Achieving the goal of implementing budget revenues is related to maintaining a sustainable level of revenues while preserving the burden of taxation and an expected positive effect of the enhanced actions in revenue administration.
The updated medium-term budget forecast for the period 2017-2019 foresees an increase in the amount of the minimum wage from January 1, 2017 to BGN 460 and preservation of this amount for 2018 and 2019.
The insurance policy for the period 2017-2019 envisages maintaining the ratios of insurance contributions for the state social insurance funds. For 2017 and 2018, the amount of the insurance contribution for the “Pensions” fund of DOO is increased by one percentage point, the aim being to reduce the shortage of funds in the budget of DOO and its subsidization from the state budget. From 2017, an increase in the insurance contribution for the “Pensions” fund for persons under Art. 69 in CSR by 20 percentage points.
The pension policy provides that from January 1, 2017, the burden of one year of insurance service in the pension formula will be gradually increased by a percentage equal to or greater than the percentage determined according to the rule of Art. 100 on CSR. For 2017, the percentage for each year of insurance service was 1.126 (a 2.4% increase). From January 1, 2017, the required insurance experience to acquire the right to a pension increases by 2 months each year until reaching 35 years and 8 months for women and 38 years and 8 months for men in 2019.
The priorities in the 2017 Budget are focused on measures related to promoting reforms in the “Education” sector, maintaining modern and combat-ready armed forces and developing the country’s defense capabilities, improving the functioning of the health care system, as well as implementing the National Program for energy efficiency of multi-family residential buildings.
To implement the priorities in the field of education, integrated measures and actions will be implemented to ensure equal access to quality education and professional training and growth based on knowledge and science and the development of young people, and the attraction of young teachers in the secondary education system .
The requirement that the defense funds for the next year should not be lower than the amount of the approved minimum for the defense sector in accordance with the decision of the Advisory Council for National Security under the President of April 27, 2015 has been met, and a resource has been provided for the acquisition of aviation equipment and multipurpose modular patrol ships for the Navy.
In the field of health care, priority areas and activities remain emergency medical care, electronic health care, maternal and child health care, medical facilities for hospital care, as well as drug policy.
The national program for energy efficiency is aimed at the renovation of multi-family residential buildings, with the aim of providing better living conditions for citizens, thermal comfort and a higher quality of the living environment through the implementation of energy efficiency measures.
As a result of achieved fiscal consolidation, the level of public debt has been stabilized at a low and sustainable level, far below the average level for the Eurozone and the EU, as well as the Maastricht criterion for public debt to GDP, and no new external debt issuance is foreseen for 2017 within the framework of the Global Medium-Term Debt Issuance Program on the International Capital Markets.
Based on the assumptions and projected net debt financing for the period 2017-2019, the public debt-to-projected GDP ratio is expected to be around 25% by the end of the period, driven by the country’s improved fiscal position.
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