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National Assembly
of the Republic of Bulgaria
Parliament approved on first reading the State Budget Act for 2011
November 11, 2010

Parliament adopted at first reading the Bill on the State Budget Act for 2011 by 130 votes in favor, 58 against and 14 abstentions. The draft was supported by the GERB and the Ataka party parliamentary groups. The votes against came from the Coalition for Bulgaria and the Movement for Rights and Freedoms parliamentary groups. Deputies from the Blue Coalition PG abstained.

The draft 2011 State Budget Act provides for an average harmonized inflation rate of 3.7 percent and a deficit not exceeding 2.5%. The projected GDP growth of 3.6% is based on expectations of higher exports and recovery of domestic consumption. The budget provides for revenues of BGN 25.84 B or 33.5 percent of the GDP. The 2011 budget provides for a nominal growth of the state revenues in comparison with 2010 by BGN 1. 296 B, or by 5.3 % more.

The minimum wage for the next year remains BGN 240 and pensions won’t be raised, despite the increase of social insurance contributions by 1.8%. Pension spending will reach 9.6 percent of the GDP, against the 11.6 in 2010. Next year's projected level of unemployment is estimated at 9.4 %, while the expected one for 2010 is 9.6 per cent. Employment is set to increase slightly - by about 0.6 percent. The rates of direct taxes remain unchanged. The 2011 budget envisions diminishing public spending by 35.5 %, with the aim to reduce the redistribution function of the state and to increase the disposable income and resources of households and businesses. The draft budget for 2011 allocates 3.5% of the GDP for Defense and Security. The money set for Education is 3.3 % and for Health care to 3.9 %.

The 2011 budget envisions expenses for the social sector (social insurance, social assistance and social care) amounting to 12, 6% of the GDP, a decrease of 1% in comparison with 2010. The expenses for recreational support, culture and religious activities represent 0.6% of the GDP. The allocated subsidies for the municipalities in 2011 amount to BGN 3.760 B, an increase by BGN 70.2 M in comparison with 2010, with priority given to the current expenditures for ecological projects against capital expenditures, which are reduced by BGN 20 M.
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