The 2027 Budget combines the preservation of income and social policies with spending restraints and measures to boost economic growth. This was stated by Deputy Prime Minister Atanas Pekanov after the budget plan was presented by Prime Minister Rumen Radev and Deputy Prime Minister and Finance Minister Galab Donev.
According to Pekanov, the budget provides for gradual fiscal consolidation, while the main focus remains on families with children, teachers and young doctors. He said that social support was being strengthened because of price pressures throughout the year.
Higher Benefits for Families and Children
Child-rearing benefits are increasing by 18.5%, while the one-off birth grant is rising by 56% - from 191 to 300 euros. Maternity benefits for those returning to work during the second year are increasing by 25 percentage points.
A new tax relief for child development is also envisaged, which, according to Pekanov, will save families up to 200 euros annually. Monthly benefits for children with disabilities are increasing by up to 704 euros.
„The state budget is a careful balancing act between different views - left-wing and right-wing, in favour of centralisation and decentralisation, of more market and more state,“ said Atanas Pekanov.Tax reliefs for children are increasing by 63% and will amount to 5000, 10 000 and 15 000 euros deducted from the tax base. Tax reliefs for children with disabilities are doubling.
Increases in Pensions and Scholarships
The budget includes a 7.8% increase in pensions and a 7.5% increase in teachers' salaries. Scholarships for students are increasing by 20%, while those for doctoral students are rising by 12.6%.
Pekanov noted that spending cuts were also planned. According to him, its share of gross domestic product, which stands at 41% in 2025 and 44% in 2026, should fall to 38% over the next three years.
Staff Cuts and Changes in the Administration
The plan envisages cutting 5042 positions in the state administration, including in the „Security“ sector and the Ministry of Interior. Salaries in the „Defence“ and „Internal Affairs“ sectors are being frozen.
The plans also include consolidating territorial structures with overlapping functions, oversight of public procurement and contracts, as well as limiting capital spending deemed unrealistic. A change is also envisaged to abolish the automatic mechanism for indexing the minimum wage, while retaining an increase in pay of nearly 7%.
Measures for Investment and Growth
The VAT registration threshold will rise to 60 000 euros next year and is expected to increase further in the following years. Tax incentives are being introduced for investment in research and development, along with funding for industrial zones and parks.
According to Pekanov, legislative changes and international partnerships will be used to attract private capital for major infrastructure projects, so that they are not financed entirely from the state budget. „The budget is certainly not perfect, because no such budget exists,“ the Deputy Prime Minister said.