The draft budget for 2026 comes too late to allow for real structural reforms this year. This was stated to bTV by the member of the Governing Council of the Bulgarian National Bank, Lyubomir Karimanski.
According to him, the first thing that is impressive is the delay of the budget.
„It is a very late budget. It is very difficult to make any reforms through this budget within this year“, believes Karimanski.
According to him, the financial framework will only start operating from August, which leaves only five months for the implementation of policies.
„Within five months, it is very difficult to turn back things that we need to change, that we need to transform or reform. Above all, a clear management program must be presented, and the budget must be a consequence of it“, he also said.
According to him, a serious problem is the accumulated expenses and the way in which the capital programs were paid.
“Former finance ministers, who really should be responsible for the expenditure part of the budget, have become very active“, said Karimanski.
He gave an example of the implementation of capital expenditures.
“As of April, we have an implementation of 156%. This means that activities were carried out and invoices were issued later, so that the costs would be accounted for in the following year,“ said Karimanski.
According to him, this is exactly how a serious accumulation of payments came about.
Reserves in the capital program
Karimanski believes that it is the expenditure part that offers the greatest opportunities for optimization.
“I would be much bolder. In terms of expenses, I would cut some of the staff, I would review the current maintenance and I would very carefully examine the capital program and municipal projects“, he added.
According to him, a serious assessment of local investments should be made.
“I don't see why the office has paid out nearly 600 million under municipal programs.“
On the insurance of civil servants
Karimanski also commented on the proposal that civil servants gradually start paying part of their insurance themselves. According to him, the compensation mechanism through an increase in remuneration renders the reform itself meaningless.
“If we have compensation through an increase in remuneration, this means that we will affect the average social security income, and hence future costs“, he commented.
The financier warned that the increase in the maximum social security income may create difficulties for some investors: “Companies that have invested in Bulgaria may look for new destinations. I know a company that is already looking to move its business to Tunisia.“
Expectations for changes in the budget
Karimanski believes that there is still a possibility for the draft budget to be adjusted.
„I expect that there are reserves where further expenses can be reduced“, he said.
Karimanski called for increased transparency in the financing of municipal projects and for it to be clear on what criteria the funds are allocated.
Karimanski also commented on the current forecast of the Bulgarian National Bank. According to him, the expectations are that the average annual inflation will be higher than that set in the budget framework.