As per the Bulgaria budget 2012 projections, foreign direct investment in this European country will reach 2.8 percent of the Gross Domestic Product.
Highlights of Bulgaria Budget 2012:
It is expected that in 2012 fiscal, budgetary deficit will range between 1.35 and 2.5 percent of the GDP. This means the maximum expected budget deficit for 2012 fiscal is 1.96 billion Bulgarian lev. The intended budgetary deficit is 1.3 percent of the Gross Domestic Product.
In 2012 Bulgaria economy is expected to grow at a rate of 2.3 to 2.9 percent, or 81.62 billion Bulgarian lev financial terms. The estimated economic growth for 2011 fiscal is BGN 76.606 billion.
The estimated rate of inflation for 2012 has been calculated at 2.8 percent, while by 2011 end it is expected to become 3.9 percent.
Minimum retirement pensions are expected to increase in 2012. At present the monthly rate is 136 Bulgarian Lev. It has been reported by prominent media houses in Bulgaria that the amount will be revised to BGN 145 and this will benefit 700,000 retirees.
Retirement age will be increased for both women and men by 1 year. Initially it had been decided that pensions will be taken up to BGN 200 per month and it will have no bearing on the age of retirement.
As permitted by the Bulgaria budget 2012, the national government will be able to borrow a maximum of BGN 2 billion or an equivalent sum in a foreign currency, from the international market through bonds.
Bulgaria is supposed to pay for global bonds worth 818 million euros in January 2013. Simeon Djankov, the finance minister, feels this sum can be used for that purpose.
Initially it had been decided that Bulgaria will have a minimum financial reserve of BGN 3 billion but now it has been revised to 4.5 billion, which is equal to the targeted amount for 2011 fiscal.
In 2012 Bulgaria will aim to restrict its public expenses to 36.5 percent of the GDP.
The estimated government revenue for 2012 fiscal is 28.7 billion Bulgarian lev, which will amount to 35.2 percent of the GDP.
The expenditure has been estimated at BGN 30 billion, which is equivalent to 36.5 percent of the GDP.
The targeted public debt for 2012 fiscal is 15.3 billion Bulgarian lev, which will comprise 18.7 percent of the GDP.
Bulgaria Budget 2012 – Overall Reception:
According to the Right Wing politicians in Bulgaria the 2012 draft budget does not have enough measures that can aid sustained economic growth or deal with poverty in an effective manner.
They have prescribed that Bulgaria needs to make the maximum possible use of funds provided by the European Union and increase opportunities and avenues for foreign direct investments.
Meanwhile the left wing leaders of Bulgaria have criticized the 2012 budget stating that it is the first ever budget to have taken away the social rights awarded to groups like mothers, the specially-abled people and the retirees.
The Bulgarian media have compared the 2012 budget to a pizza without meat, just like Simeon Djankov did in 2010 to describe the then austerity budget.
Bulgaria Budget 2012 – Analysis:
According to economic experts the 2012 budget of Bulgaria is similar to the one for 2011 fiscal. Both the budgets have projected substantial expenses for pensions and minor deficits. They feel that the budget is very conservative as the national government is looking to safeguard against various risks.
Analysts still opine that the 2012 budget might be difficult to implement because of factors like weakening of global economy, the debt crisis in Eurozone and economic slowdown in the European Union. Other matters like decreasing international and domestic demand and less than expected revenue could also pose problems in implementing the budget effectively.
Bulgaria is facing a debt crisis, which could well affect the banking sector and in such a situation a lot of financial assistance will be required to address the situation. Analysts say that such a situation is probably unlikely, but if it does happen it can assume serious proportions because of the potential capital aid involved.
They think that a projected growth rate of 2.9 percent is not realistic enough initially it had been said that Bulgarian economy will achieve a growth rate ranging from 4 to 4.5 percent in 2012 fiscal.
The projected budgetary deficit of Bulgaria in 2012 will allow it to remain among the top economic performers in the European Union for that period.
Bulgaria Economy – Steps for the Future:
Following are some steps that are going to be taken for the betterment of the Bulgarian economy in 2012 but have not been included in the proposed budget as yet:
The minimum wages, provided on a monthly basis, will go up to 290 Bulgarian Lev from 270 Bulgarian Lev. This will be implemented from 1st May 2012 onwards.
Financial assistance from government on maternity leave will increase to BGN 270 from BGN 240.