世界银行-保加利亚公共财政评论2023（英）-2023.12-90页_881kb

Bulgaria Public Finance Review 2023 - Summary

Executive Summary

Bulgaria maintained fiscal discipline with relatively low public debt (around 23-29% of GDP since 1997), but faced moderate deficits during COVID-19 and energy crisis response (up to 4% of GDP). Despite recent consolidation efforts, fiscal pressure remains due to lingering pandemic-related spending. The medium-term fiscal path requires balancing consolidation with development needs, especially given the country's eurozone accession target and structural reforms needed to address aging demographics and low productivity.

Macroeconomic Context

Growth slowed significantly in 2023 to 1.4% due to energy price shocks, tight global financial conditions, and political uncertainty. Inflation has moderately decreased but remains above target. Growth is projected to recover gradually through 2024-2025, supported by fiscal support measures and EU funds absorption.

Public Finances Overview

• Fiscal Deficit: Moderated in 2023 from previous crisis years but remains wide due to unphased-out pandemic measures.
• Debt: Public debt is sustainable at below 30% of GDP, though aging-related spending pressures threaten to increase this ratio by mid-century.
• Fiscal Rules: Bulgaria broadly adheres to EU fiscal rules with moderate deficits and low debt-to-GDP ratios, benefiting from its historical commitment to fiscal prudence.

Fiscal Risks

• Explicit Risks: Low overall, with manageable state guarantees and deposit insurance.
• Implicit Risks: Significant challenges from aging population pressures, especially in pensions and healthcare; potential materialization of natural disasters; rigid fiscal stance limiting response flexibility.
• Procyclical Risk: Fiscal tightening risks during low-growth periods could exacerbate economic contractions.

Revenue Analysis

• Overall Performance: Tax-to-GDP ratio (38%) remains relatively low by EU standards, particularly indirect taxes.
• VAT Gap: Bottom-up analysis indicates discrepancies with top-down estimates; medium-sized businesses and certain sectors show high noncompliance rates.
• Health Taxes: Low excise rates on tobacco and alcohol limit revenue potential despite their significance; tax increases could boost revenues and improve public health outcomes.

Spending Efficiency and Effectiveness

• Public Procurement: High risks of noncompetitive practices resulting in efficiency losses; potential savings of 5.3% of procurement contracts value could be achieved through improved competition and process.
• Education Spending: Inefficiency persists despite transfers designed to support disadvantaged municipalities; learning outcomes show no significant improvement despite increased spending.
• Social Spending: Limited impact on child poverty despite various targeted programs; reforms needed to improve targeting and generosity of social benefits.

Key Recommendations

1. Revenue Enhancement:

   • Refine VAT audit programs to target high-risk纳税人 and improve compliance
   • Increase excise taxes on tobacco and alcohol to boost revenues while reducing consumption
   • Explore higher property taxes to supplement revenue base

2. Spending Improvements:

   • Implement strategic sourcing reforms in public procurement to increase bidder numbers and competition
   • Shift education funding toward results-based financing models
   • Enhance targeting and generosity of child-focused social benefits

3. Fiscal Sustainability:

   • Develop preventive fiscal risk management systems
   • Strengthen medium-term budget frameworks to address demographic challenges
   • Accelerate reforms in health care and pension systems to improve sustainability

4. Growth Support:

   • Leverage EU funds effectively for productive investments
   • Promote public-private partnerships for infrastructure development
   • Simplify bureaucracy to improve business climate and attract investment