Bulgaria’s Budget for 2008

Friday, 02.11.2007

The Associated Press

Bulgarian government presented a draft 2008 state budget Wednesday, projecting a record plus of 3 % of gross domestic product and economic growth of 6.4 % of GDP.

The draft budget also foresees annual inflation of 6.9 percent next year — up from 4.4 percent forecast for this year. The current account deficit is set to reach 21.1 percent, compared with 11.8 percent in 2007.

In 2007, growth is expected to reach 5.8 percent of GDP; and the budget surplus is expected to be 0.8 %.

Finance Minister Plamen Oresharsyi said the budget surplus target “is a measure to guarantee the sustainability of the lev backing and the stability of the exchange rate.”

Bulgaria’s currency, the lev, is pegged at a fixed rate to the euro under a currency board arrangement introduced in 1997. The board imposed strict financial rules aimed at restoring fiscal discipline, preventing deficit spending and controlling inflation.

Bulgaria, which joined the EU on Jan. 1, has said it wants to start using the euro by 2010.

The 2008 draft budget allocates 4.2 percent of GDP to education and health care, 2.1 percent to defense and 2.4 percent to public works.

Public sector salaries will rise 10 percent beginning next Juny, while pensions will go up 9.5%.

In an effort to crack down on Bulgarian property evasion, the government plans to introduce a 10 percent flat tax on personal income in 2008. Currently, the tax rate ranges from 20 to 24 percent.

Last year, Bulgaria lowered its corporate tax by five points to 10 percent.

Lawmakers will begin debating the budget next week and are set to vote on it in mid-December.

Nine countries from ЕС raise their barrier for the Shengen space. From this evening in midnight the Shengen space will widen with nine countries which entered in EU in 2004 year , with removal of customs control onthe airports , said the spanish Agency EFE. From sunday in 00.00 h Estonia, Latvia, Litva, Poland , Hungary Chech republic, Slovakia,Slovenia and Malta join the european zone for free transport zone.Overland and sea border control for citizens from these countries was removed  through December last year. The removal of the customs point in the airports are one new unique historical achievement. The 24 european countries now don’t have borders said the eurocommisair responcible for  transport and substitute - president of European commission Jack Baro.