It is not realistic for what is being stated to happen, because if the budget were made in 10 days, there would be no need for so many ministries. This was said on the air of “Hello, Bulgaria” Lyubomir Datsov, former Deputy Minister of Finance and member of the Fiscal Council.
“The budget starts 8 months earlier, there are many procedures that are being gone through, 1,000 people are involved - in the Ministry of Finance alone there are 150 to 200 people who calculate and make the estimates. If everything could be reversed in 10 days, then this process would be meaningless,” Datsov believes.
According to him, the budget has completely contradictory political and economic goals. “This cannot be resolved unless everything is reconsidered,” he explained.
“The budget is like a structure that is planned to be sustainable with about 38% of GDP. I am one of the architects, we started this direction in 1997. When it reaches 46%, what can happen is that your legs will bend, because it will not be able to withstand it. Or a new budget structure will be made, related to raising taxes, because a sustainable source of financing must be found,” Datsov commented.
According to him, in addition to financing expenses, the budget also has macroeconomic values. “It must be able to float, have fiscal space and, depending on the economic cycle, be responsible for and manage this process”, the expert commented.
“Structural reforms are made over a series of years. They must be identified, since no matter which sector we touch at the moment, the model needs to be changed. Rather than making changes to upgrade, there is a need for reconstruction - starting with pension insurance, which is perhaps the biggest structural and long-term problem, going through healthcare, which is outrageous, going through education and I'm not even talking about internal order and defense”, he added.
According to him, this is not a conversation about cosmetic changes, but structural ones that will have to be made for many years.
“In our report, at this stage, we already have revenues that we think will not come. It's about 3.5 to 4.7 billion euros. They have been inflated to resemble 2025. Now we see that at least 3.5 billion euros will not come. Something is wrong. Either the revenues are wrong, or the GDP forecasts”, explained Datsov.
“This tax revenue collection rate is 30.4% of GDP. It includes one-time revenues that came from banks and others. By generating and removing extraordinary revenues, it will turn out that the revenue collection rate is actually 30.1%”, he commented.
“For next year, we have a planned change in the structure of GDP - a little more investment, a little more export”, explained Datsov.