Bulgaria’s state budget for 2008 would be tough to fulfil, provided that it had to achieve a 25 per cent increase on its revenue side, Finance Minister Plamen Oresharski said on October 31, as quoted by investor.bg.

Oresharski spoke to reporters immediately after submitting the draft budget for next year for approval by Parliament. Budget 2008 was aiming at macroeconomic stability and steady economic growth. Because of the expected high current account deficit for 2008, which was expected to reach 21.9 per cent of the gross domestic product (GDP), Cabinet had to pursue another three percent of GDP budget surplus, to use it to partly offset the deficit. Furthermore, this was to guarantee the real coverage of the local currency, the lev, and to ensure stability of the currency exchange rate, Oresharski said.

The flat tax rate on personal income was to be introduced in Bulgaria for the first time in 2008. It would be the lowest in Europe and was expected to attract more foreign investment. Government’s forecast for 2008 envisages an inflow of foreign direct investment worth 4.7 billion leva, or 15 per cent of the projected GDP. The figure expected for the entire 2007 was 4.6 billion leva but some analysts said it might exceed five billion leva.

Budget 2008 envisages a record-high state investment of 4.25 billion leva, compared to 2.8 billion leva for 2007. The money for next year was to be spent mainly on infrastructure projects. In absolute terms, the funds for education for 2008 would be by 470 million leva more than that for 2007. The increase in healthcare spending was to grow by 350 million leva.