Bulgaria Public Finance Review 2023
Bulgaria has traditionally adhered to fiscal discipline and prudent fiscal policy since the introduction of its currency board arrangement in mid-1997. After a gradual decline in the 2000s, public debt has remained among the lowest in the European Union (EU), hovering in a narrow band between 17 and 29 percent of gross domestic product (GDP) for the last 10 years. The low level of public debt has been supported by relatively low fiscal deficits or even surpluses in some years. This has helped the fiscal system absorb recent shocks relatively unscathed and provided sufficient fiscal space to address emerging crises and limit the scarring on economic activity, the labor market, and incomes. This report provides fresh evidence on Bulgaria’s fiscal landscape and some of the key issues that fiscal policy may need to address going forward. To start with, the report looks at opportunities to increase revenue collection with two special focuses - the value-added tax (VAT) compliance gap and health taxes (excises on tobacco and alcohol products). Social spending effectiveness in reducing headline poverty and child poverty in particular also requires urgent attention from policy makers. An updated fiscal incidence analysis shows that Bulgaria’s fiscal system has a limited impact on overall poverty; neither is it effective in addressing child poverty, as it reduces it by just 0.3 percentage points.
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| Format: | Report biblioteca |
| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2023-12-22
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| Subjects: | FISCAL POLICY, GOVERNMENT REVENUE, FISCAL SPENDING, |
| Online Access: | http://documents.worldbank.org/curated/en/099122123051567091/P18022318324dc060196411826bccae6a6e https://openknowledge.worldbank.org/handle/10986/40804 |
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| Summary: | Bulgaria has traditionally adhered to
fiscal discipline and prudent fiscal policy since the
introduction of its currency board arrangement in mid-1997.
After a gradual decline in the 2000s, public debt has
remained among the lowest in the European Union (EU),
hovering in a narrow band between 17 and 29 percent of gross
domestic product (GDP) for the last 10 years. The low level
of public debt has been supported by relatively low fiscal
deficits or even surpluses in some years. This has helped
the fiscal system absorb recent shocks relatively unscathed
and provided sufficient fiscal space to address emerging
crises and limit the scarring on economic activity, the
labor market, and incomes. This report provides fresh
evidence on Bulgaria’s fiscal landscape and some of the key
issues that fiscal policy may need to address going forward.
To start with, the report looks at opportunities to increase
revenue collection with two special focuses - the
value-added tax (VAT) compliance gap and health taxes
(excises on tobacco and alcohol products). Social spending
effectiveness in reducing headline poverty and child poverty
in particular also requires urgent attention from policy
makers. An updated fiscal incidence analysis shows that
Bulgaria’s fiscal system has a limited impact on overall
poverty; neither is it effective in addressing child
poverty, as it reduces it by just 0.3 percentage points. |
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