The draft budget for 2027 envisages reductions in the deficit, new government debt and expenditure as a share of gross domestic product, Deputy Prime Minister Atanas Pekanov said on BNT’s “More of the Day” programme. According to him, the government is seeking a balance between fiscal discipline and preserving social policy.
“There is no perfect budget, but we sought precisely such a balance,” Pekanov said, describing the proposals as a gradual fiscal consolidation. He said that in recent years expenditure had grown faster than revenue and that Bulgaria had been placed in an excessive deficit procedure.
Lower new debt and cuts in the administration
According to the parameters presented by the deputy prime minister, new government debt next year will amount to €8.6 billion, compared with around €10 billion this year and last year. Expenditure, which has reached 44% of GDP, is expected to fall to 39.6%, then to 38.9% and subsequently to 38%.
Measures to curb expenditure include the elimination of 5,042 positions in the state administration. Pekanov also said that a freeze on remuneration in the Interior Ministry and the “Defence” sector is envisaged, as well as on MPs’ salaries.
A 5% increase in remuneration has been budgeted for the public sector, with employees in the “Security” and “Defence” sectors excluded. The minimum wage is planned to be €660. Pekanov defended the amount by citing the need to combine higher incomes with business competitiveness. “Anyone can promise a minimum wage of €1,000,” he said, but stressed that calculations and financial backing were necessary.
More assistance for families and funding for young doctors
Pekanov said that curbing expenditure would not come at the expense of the entire social programme. The benefit for the birth of a first child is proposed to increase from €191 to €300. Tax relief for families with one, two and three children will reach €5,000, €10,000 and €15,000 respectively, deducted from the tax base.
A tax relief of up to €200 per year for private lessons and training costs is also envisaged. Reliefs and benefits for children with disabilities will be increased, while more funding is planned for scholarships for young doctors and students, pensions and healthcare. An additional €30 million has been guaranteed for young doctors, the deputy prime minister said.
Pensions will be increased in line with the Swiss rule. Pekanov noted that the measures were also linked to the pressure on household incomes caused by inflation.
Taxes, energy and Brussels’ assessment
The draft budget envisages a one-off 33% tax on excess profits in certain sectors. According to Pekanov, the measure should help the country exit the excessive deficit procedure without restricting social expenditure.
The government is also discussing additional compensation for businesses because of high energy prices, but the specific parameters are still being finalised. Projects to digitalise the National Revenue Agency are also planned, aimed at improving revenue collection and uncovering abuses.
According to Pekanov, the European Commission recorded a 10.3% increase in expenditure in 2026, compared with an allowable 4%. For next year, a planned increase of 1.3% has been indicated, against an authorised 3.4%. The deputy prime minister said that the government’s aim was to meet the requirements for reducing indebtedness while preserving the main social payments.
Sources: bntnews.bg