Bulgaria expects to post a fiscal surplus of 2.6 percent of gross domestic product as of the end of October, keeping it on track to outperform its initial deficit target and end the year in the black, the Finance Ministry said on Wednesday.

It said the Balkan country’s consolidated fiscal programme recorded a surplus of 2.66 billion levs ($1.54 billion), or 2.5 percent of GDP, in the first nine months of 2018, reports Reuters. 

Bulgaria is expected to end 2018 with a budget surplus of 0.5 percent.

On Sunday Bulgaria’s centre-right government approved a 2019 budget draft with a fiscal deficit of 0.5 percent of economic output, earmarking more funds for public wages, education and European Union-backed projects.

The government will fund a 10 percent increase of monthly pay to all public servants, which will translate into a 20 percent increase in teachers’ salaries and will extend more money to small municipalities.

Sofia sees its small, open economy expanding by 3.7 percent next year compared to 3.6 percent in 2018, while the average annual inflation is expected to increase to 3.0 percent.

Government revenues in September rose 10.9 percent from the same period in 2017 to 29.2 billion levs.

Spending rose to 26.5 billion levs in September from 23.7 billion levs a year ago, mainly due to higher expenditure for teachers wages and state pensions, as well as capital expenditure on EU-funded projects, the ministry said.

Fiscal reserves held under Bulgaria’s currency regime, which pegs the lev to the euro, stood at 11.2 billion levs at the end of September.