Page 118 - SE Outlook Regions 2022

government’s gross financing needs remain high at about 20% of GDP
annually,” the IMF warned.

4.2 Budget and debt - Bosnia & Herzegovina

Neither the state-level government nor the government of the Bosnian
Federation have yet adopted their budget for 2022. At state level, the
reason for not adopting the budget is the constant political blockades of
the parliament as well as the governments.

The government of the Republika Srpska has drawn up the Budget
proposal for 2022, amounting to BAM4.02bn.

Bosnia's indebtedness reached its peak in 2014, when public debt
amounted to 43.4% of GDP, followed by a period of declining
indebtedness. In the period from 2015 - 2018 Bosnia implemented
fiscal consolidation, bringing the debt down, but it was pushed up again
since the start of the pandemic.

According to the DEP, in 2020 Bosnia's public debt was €6.4bn, having
increased by €711mn since 2019. This means that the debt in 2020
reached 36.72% of Bosnia’s GDP, a 4.19 percentage point rise from
2019, when it was 32.53% of GDP.

The DEP does not have an estimate of public debt for 2021 and 2022.
But, the IMF estimates that public debt will increase to 38.6% of GDP in
2021 and is expected to rise further in 2022 to 40.2%. The latest data
from the Bosnian Ministry of Finance and Treasury for the third quarter
of 2021 put Bosnia’s public debt at 34.44% of GDP.

4.3 Budget and debt - Bulgaria

Bulgaria will aim for a budget deficit of between 3.5% and 4.5% of GDP
in 2022 and will have its budget for the year by the end of January,
according to a preliminary agreement reached by representatives of the
four political parties forming the new ruling coalition – Change
Continues, the Bulgarian Socialist Party (BSP), There Are Such People
(ITN) and Democratic Bulgaria.

The members of the ruling coalition have also agreed that a budget
revision will be made in July when there is more clarity on revenues.

Bulgaria also does not intend to change the value added tax (VAT) in
2022. However, a further analysis will be carried out of BSP's proposal
to lower the VAT on medicines and basic goods and services.

In 2021, Bulgaria is expected to post s budget surplus. In the first
eleven months, the finance ministry reported a consolidated budget

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