Bulgaria’s central government budget showed a surplus of BGN 789M equivalent to 0.9% of the projected 2015 GDP at the end of July, the Finance Ministry announced on Monday.

This compared with a budget gap of BGN 1.15B, or 1.4% of GDP at the end of July 2014.

The turnaround to surplus was due to an increase in both budget revenue and grants, the Finance Ministry said in a monthly budget report.

Budget revenue and grants combined totalled BGN 19.02B as of end-July, or 62.7% of the 2015 plan. Compared with year ago, budget revenue and grants have increased by BGN 2.18B, or 12.9%.

Tax revenue, including social insurance contributions, grew by BGN 1.25B (+9.4% y/y), reaching BGN 14.44B at the end of last month, or 60.1% of the 2015 plan. Grants, most of them  EU funds, increased by BGN 834M (+58.5% y/y).

Revenue from direct taxes was BGN 2.74B at end-July, a rise of 5.3% from a year earlier mainly due to increased revenue from corporate and personal income taxes.

Indirect taxes such as Value Added Tax (VAT), excise and customs duties brought BGN 7.17B into state coffers in January-July, or 59.2% of the 2015plan,

VAT revenue increased by BGN 520.5M compared with end-July 2014, reaching BGN 4.65B at the end of last month, or 60% of plan. Excise revenue was 10% higher at BGN219.2M, while customs revenue increased by 2% on the year, reaching BGN 87.2M.

Social and health insurance contributions increased by a nominal 9.3% year-on-year, reaching BGN 3.94B at end-July, or 59.3% of the 2015 plan.

The central government budget spending, including Bulgaria’s contribution to the EU budget, totalled BGN 18.23B at the end of last month, or 55.5% of the plan for the whole year. The figure was higher by BGN 242M, or 1.6%, compared with the end of July 2014.

The government’s fiscal reserve totalled BGN 11.2B as of July 31, 2015, including BGN 10.7B deposited with the Bulgarian National Bank and other banks.

The government has projected 3% deficit in the 2015 budget bill adopted by Parliament in December. Budget revenue is forecast at 36.8% of GDP and expenditure is set at 39.8% of GDP.

Source