[size=75:2za1wiqz]Regal retail 6 April 2010

Consumption in Bulgaria has declined to the levels of 2006

Consumption in Bulgaria continues to shrink, and has returned to 2006 This data shows the performance of the budget for the first two months of this year, the finance ministry published before Easter.

Indicator of consumption Revenues from VAT and excise duties are paid accurately by end users. The proceeds from them in January and February were comparable to the beginning of 2006 last year collection of indirect taxes was similar to that of 2007. According to various estimates expected domestic demand, which is part of final consumption this year to decline by 3.5 to 5%.

The largest decline was in the collection of VAT - 46% compared with the first two months of 2009, revenues from excise taxes fell by 13.8 percent. The crisis in the economy is evident in the results of corporation tax - minus 21.7%. Minimal increase in revenue collected at the end of February to the first 2 months of last year only to income tax collected from individuals.

The main reason for the decline in revenue, according to Finance Ministry team are factors with a single influence such as the cost of the cabinet "
Stanishev"
in December 2008 then on a monthly basis was recorded a deficit of 2.5 billion Some of them returned back form of indirect taxes, so in early 2009 reached a high base compared with that collection of VAT in January and February 2010 pales.

Another explanation for the declining revenues is the revival of exports in which VAT is payable in the country, which is designed for Bulgarian products, exporters and recover from the Bulgarian tax credit budget.

For the first two months of the year the budget deficit reached 1.398 billion, or 2% of estimated GDP for 2010, for February it was 899 million Another comparison shows that total revenues for January and February dropped by 27.4 percent, while costs increased by 22.1%.

Simeon Djankov experts explain the latest figure mainly to pressures on the funds of the state social insurance. "
The main factor for the reported increase in social spending is the base effect of the increase in pensions in July 2009, wrote in the bulletin of the Ministry.

At the same time increase the capital costs, which are formed mainly by investment and local government - 34.8 percent compared with the first two months of last year to 426 million leva
In its newsletter the Ministry of Finance said that fiscal policy in the first quarter is moderately expansive, but the deficit is temporary and is due to efforts to settle arrears of government obligations from previous years to contractors and suppliers on contracts (mainly from the construction sector ) as well as subsidies paid to farmers.

Until these arrears it was following the Cabinet's attempts to balance the budget last year. According to various estimates only delayed payments to the private sector can reduce the gross product by 1% below its potential.