Figure 7: Budget Balance - Bulgaria versus East Europe, 2005-2011
Source: Economist Intelligence Unit, Country Report: Bulgaria, February 2010
Welfare Expenditures Since July 2009, expenditure growth has fallen markedly across most categories of spending. Social expenditure, which accounts for around 40% of total expenditure, came down moderately. Meanwhile, spending on maintenance costs, which accounted for 16.8% of total expenditure, was significantly lower in year-on-year terms, as was spending on wages, which accounted for 16.3% of the total, and capital expenditure, which made up 14.5% of total spending. This tightening of the purse strings was deemed necessary, as the performance of tax revenue continued to deteriorate in August and September of 2009, and a look at the absolute numbers reveals that expenditure cuts were an important factor in stabilizing the budget: Tax revenue averaged BGN 1.7 billion per month in March-July and BGN 1.6 billion in August-November, whereas average monthly expenditure dropped from BGN 2.2 billion a month in March-July to BGN 1.9b billion in August-November.66 In late 2009, Bulgaria's Labor Ministry announced pans to invest more than BGN 1 billion in the labor market in 2010 in order to tackle unemployment: BGN 250 million from the EU funds under the “Development of Human Resources� Operational Program, BGN 400 million from the state budget and BGN 400 million to be retained by Bulgarian businesses upon reduction of social security payments by 2% starting January 1, 2010.67
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