Bulgaria reported the highest inflation in the eurozone for April - 6.2% on an annual basis, with an average of about 3% for the currency union. The topic was commented on by economist Assoc. Prof. Shteryo Nozharov and financial analyst Deyan Vassilev in the program “Your Day“ on NOVA NEWS, where they outlined possible measures.
“Bulgaria has the highest inflation in the eurozone, but not in the European Union. The solution is a highly conservative and restrictive budget for 2026. Expenditures must be limited within the framework of European rules, with their increase being controlled, and total government spending to be around 38% of GDP“, Assoc. Prof. Nozharov specified. As an additional measure, he pointed to tightening bank buffers: “Without touching interest rates, lending can be limited through stricter requirements for banks.“
Financial analyst Deyan Vassilev also supported the need for a strict fiscal policy, but emphasized the internal problems of the budget. “The automatic increase in salaries in the public sector is a hidden pro-inflationary mechanism that must be eliminated. We have the opportunity to reach a 40% share of budget expenditures. This is key because the public sector is currently generating pressure on prices,“ Vassilev is categorical. He also emphasized the need to optimize the administration and eliminate inefficient spending. Among his criticisms was the role of the Bulgarian Development Bank, which, in his opinion, should return to its main function - supporting business, rather than financing public projects.
Financial analyst Deyan Vassilev also supported the need for a strict fiscal policy, but emphasized the internal problems of the budget. “The automatic increase in salaries in the public sector is a hidden pro-inflationary mechanism that must be eliminated. We have the opportunity to reach a 40% share of budget expenditures. This is key, because the public sector is currently generating pressure on prices“, Vassilev is categorical. He also emphasized the need to optimize the administration and eliminate inefficient spending. Among his criticisms was the role of the Bulgarian Development Bank, which, in his opinion, should return to its main function - supporting business, rather than financing public projects.
According to experts, the main problem remains the so-called automatic spending mechanisms, especially in education and internal security. According to Assoc. Prof. Nozharov, they “contradict the principles of public finance“ and can hardly be limited due to strong union pressure.