The first budget in euros is still in draft, but it is already a source of tension between the state and business. The chairman of the Confederation of Employers and Industrialists in Bulgaria (CBIB) Kiril Domuschiev said on bTV before its adoption that Bulgaria is on the verge of economic stagnation and that without urgent reforms the country is going according to the “Romanian scenario“ — high inflation, debt and low productivity.
“For the last four-five years, the state has been under the influence of very strong populism, which is now professed by absolutely all parties. The uncertainty of any political party in the ruling coalition that this government will last, that there will be no elections, makes them make commitments to unions, to partners who are radical left-wing organizations, with very radical ideas that are not good at all for Bulgaria and the Bulgarian economy“, Domuschiev believes.
According to him, it all started years ago, when the PP was in power.
„Asen Vassilev was giving away money. That's why he is the person who, as Finance Minister, forgot about the policy that at least 3 ministers had before him, of conservatism, of budget discipline, etc. and started giving away money. This thing opened Pandora's box, got us into a black hole that I don't see how it can be filled. We're not talking about reforms, but about this – let's give. But this giving comes from the real sector – from those who work, invest and pay taxes“, said Domuschiev.
„The increase in social security contributions will hit the economy“
Business is categorically against the increase in pension contributions by 2%, which is being discussed in the draft budget.
„This means an increase in business costs, the cost of production and new pressure on inflation. Ultimately, workers will also receive less, because 2% will be withheld from them. This kills the competitiveness of enterprises“, said Domuschiev.
„We are heading towards a Romanian scenario – debt and stagnation“
„Categorically, this is our opinion at KRIB that we are heading towards the Romanian scenario. This means an increase in inflation, an increase in foreign loans, an increase in Bulgaria's foreign debt, which one day our children will have to pay. Economic growth will decrease. These are simply things that kill the state. And the corresponding rating of this state. So this appeals to business, to be reasonable, to be conservative in making the budget, to stop the burden of salaries and expenses in the public sector, because here we are talking not only about administration, here we are also talking about state-owned companies. We cannot continue to subsidize BDZ with billions. Given that there are so many private companies waiting“, Domuschiev believes.
„The private sector is coping, the state is lagging“
„Bulgarian private business pays high salaries and is already attracting foreign specialists. In the last year alone, 50,000 foreigners have come to work in our country“, the chairman of the Bulgarian Chamber of Commerce and Industry pointed out.
However, the lack of digitalization and efficiency in the administration hinders the investment climate:
„Ask any serious entrepreneur – all companies are investing in artificial intelligence and robotization, while the state is not even talking about it.“
„Europe is in a knockdown, we – even further back“
“Europe is in a vice between the US and China. We missed the moment to stimulate innovation and industry. Bulgaria, which does not have their capital and traditions, will suffer the most“, warned Domuschiev.
He predicts that in economic terms 2026 will be difficult with low economic growth.