The 2027 budget is realistic and feasible, and the planned fiscal consolidation can be achieved without drastic cuts to salaries and pensions. This was stated by Associate Professor Lyuboslav Kostov, a lecturer at the University of National and World Economy, on Radio FOCUS.
According to him, public finances have problems, but they are not as serious as the opposition portrays them. Kostov also commented on the prime minister’s comparison to “a heavy truck with failed brakes,” describing the assessment as overly extreme.
“The budget seems feasible and realistic to me,” said Lyuboslav Kostov.He pointed out that the problems in public finances are not new, but in his view the budget could be more ambitious in terms of reforms and implementation targets. The projected deficit of 3.5% for next year, he said, makes it possible to demonstrate fiscal consolidation to European partners without achieving this through a sharp reduction in incomes.
Incomes and pensions remain under pressure from inflation
Kostov pointed out that the budget provides for the implementation of the Swiss rule for pension indexation. However, he described the incomes policy as insufficiently robust amid inflationary pressure.
According to him, a 5% increase is planned, while the increase for teaching professionals is 7.5%. Kostov expressed doubts that these rises would fully compensate for inflation. He called for more precise determination of remuneration in the individual sectors and for narrowing the gap between the public and private sectors, where average salaries are growing faster.
Support for businesses and non-household consumers
The discussion also addressed state support for businesses and non-household energy consumers. Kostov defended the active role of the state, stating that the market is not perfect and that a number of economic activities operate in the presence of monopolies and cartels.
In such conditions, he said, the state should protect the middle class and the end consumer instead of relying entirely on market self-regulation.
The budget was presented at UNWE
Kostov described the presentation of the financial framework at UNWE as a practice that is widespread in Western democracies. According to him, in Bulgaria the state budget has traditionally been presented by the finance minister at a briefing held at the ministry.
He said that the current format was the first instance in which the budget had been presented in an academic setting, and he viewed the change positively.
Sources: focus-news.net