Budget indicators have pointed to an excessive deficit procedure – these are the observations throughout 2025 of economist Julian Voinov. In his words, this will cost our economy dearly.
“If we do not implement the measures set out in the program that must be adopted to reduce the budget deficit, we will pay a real fine of 0.05% per year and if this program is not implemented within 4 years, we will be fined 200 million euros in real money“, Voinov pointed out and added that the EC is now monitoring primary spending.
He does not rule out drastic reforms and the elimination of automatic measures.
“We need to reduce spending by the order of one billion euros“, Voinov said.
“Every deficit leads to the accumulation of debts, and we see that in our political environment the drastically increasing debt is not viewed with concern“, he added and pointed out, that
"With regular measures, with untying the automatisms, restructuring, releasing pensioners in the security sector - just by releasing pensioners we can save about 100 million".
Senior researcher at the Institute for Market Economics Petar Ganev said that long-term measures are needed. And the procedure is not so simple and does not end with the fact that if the deficit of 3% is exceeded, monitoring automatically begins.
„We had a very large deficit with CorpBank and did not enter into a procedure, since it was clear that it was a one-time payment for CorpBank. Before that, we were in a procedure for two years more than 10 years ago. So we also have experience entering and exiting this procedure, but it is always an analysis that examines what is the reason for the deficit that you have, but also what is the medium-term plan, what is the fiscal-structural plan for spending – how they will grow in the coming years.
It is evident that the growth of spending with this increase in personnel costs of 40-50% in some departments, it was clear that it would lead to a deficit. But the problem is actually what we do with the budget for 2026, 2027 and 2028. If we enter an excessive deficit procedure, this gives another incentive to consolidate the fiscal balance. Now there is also a huge public incentive, because in December the protests were also aimed at budget problems and attempts to raise taxes.
The most detailed document of the BNB two years ago stated that if we enter into such a procedure and start consolidating by raising taxes, rather than by controlling the expenditure side, we are putting economic growth at enormous risk. Something that happened in Romania.“
Ganev also adds that the budget deficit is not just 3.5%, but is constantly increasing.
According to Maria Mincheva from the Bulgarian Industrial Association, we must enter into budget discipline within a few years, and now the government is faced with the draft budget for 2026 and the framework for the following years in order to limit the growth of expenses.
„Every country is obliged to demonstrate corrective actions within a six-month period. Nothing will stop in the next few months – just as we did not get there in a few months in this situation, so we will not get out in a few months. This is a very clear signal to politicians when drawing up the state budget to be careful and more conservative in their promises.
In the context of the budget procedure, this means that the recommendations of the employers' organizations to think about a very serious optimization of the expenditure side become even more valid“, she pointed out.
According to Mincheva, now the growth of the economy should be driven more by investments and promotion of exports.
The economist from EKIP Stoyan Panchev believes that now Brussels will no longer turn a blind eye to the data submitted by Bulgaria.
„This deficit, which was presented publicly and with which we were accepted into the eurozone, does not correspond to reality, the real deficit for 2025 is significantly larger. We have submitted data for a 3.5% deficit in 2025, in the autumn of this year we will find out what Eurostat's assessment is. If Eurostat does not close its eyes, as it did when Bulgaria entered the eurozone, then the deficit will certainly be over 5%“, said Panchev.
The European Commission's forecast for Bulgaria's deficit for 2026 is 4.1% – the data was published a week ago, but according to Panchev it will be even higher.
„This is largely due to the hidden and massaged deficit in the last three years and is not a new situation“, the economist is categorical.
According to him, it could lead to a freeze in wage and pension increases and even an increase in taxes.