I would not propose such a budget, bolder measures are needed on the expenditure side. This was commented on “From the Day“ on BNT by the member of the BNB Governing Council Lyubomir Karimanski, who analyzed the proposed parameters of the state budget.
According to Karimanski, the high deficit is the result of expenses accumulated at the beginning of the year, increases in public sector salaries and commitments made on municipal projects.
“Because a lot of expenses accumulated that were made at the beginning of this year, while the revenue side was preserved as it is in 2025. It was also voted to raise the salaries of everyone in the public sector by 5%, which increased the expenditure part even more. The expenditure part was also increased in projects in the municipalities“, he also said.
Asked if he would propose such a budget, he replied no and that he would be bolder in the expenditure part.
„I would be bolder in various measures that can be applied in the expenditure part. I would also immediately take into account the dynamics when the macro framework needs to be changed“, the banker replied.
Karimanski pointed out that the budget is based on the spring macroeconomic forecast, which already diverges from the BNB data. „Because this budget is based on the macro forecast from the spring of this year. "If in the spring forecast we have a set inflation of 4.3%, and the BNB says that the average annual rate will be 5%, the difference is not small," he commented.
According to him, this leads to serious deviations in the revenue side, especially in VAT and excise duties, and therefore a revised forecast is necessary. According to him, one of the options for correction is the capital program, which would be difficult to implement within the remaining months.
“Part of the capital program may change, since it will not be possible to implement it within only 5 months“, he also said.
Karimanski also commented on the implementation of municipal projects, indicating that some of them can be rescheduled, but it is important to assess which ones have a real economic effect.
Regarding housing loans, Karimanski emphasized that the BNB has a limited set of tools and has already taken measures to “cool“ in the mortgage market.
“The bank did what it could to cool it down and we notice that there is such a cooling, albeit slowly, from the growth of mortgage loans“, the banker added.
He added that in addition to the central bank, the state must also create alternatives for citizens to invest.