There are several positive moments in the budget that should be noted, but there are also serious grounds for criticism. They are related to the excessive deficit, the growing state debt and the insufficiently ambitious reforms. In our opinion, a bolder approach should have been taken. Many of the necessary reforms were postponed for the next budget, which is not so far away, but some of them could have been implemented now. This was said by the Chairman of the General Assembly of the Association of Industrial Capital in Bulgaria (AIKB), Vasil Velev, in the program "Bulgaria, Europe and the World in Focus" on Radio FOCUS with host Tsonya Sabcheva.
"An indisputable positive aspect is that the tax and social security model is not changing and tax and social security rates are not increasing. In addition, the "skeletons were taken out of the closet" - there are no hidden costs, transferred liabilities or withdrawn revenues from future periods to create an artificially better picture of the budget. Liabilities to businesses will not be postponed, the activities carried out will be paid off and liquidity will not be withdrawn from the economy," he explained.
According to him, the elimination of a number of automaticities is positive, as well as the planned reduction in expenses by 10% in some budget structures and ministries, albeit with numerous exceptions. The higher taxation of gambling activities is also correct. "Measures are planned to lighten the economy, with additional revenues of about 200 million leva from taxes, 100 million leva from social security contributions and approximately 200 million leva in savings from limiting abuses of social funds. Over 100 million leva in additional revenues from gambling taxation are also expected", the expert added.
However, in his words, this is not enough. According to him, there are measures that seem symbolic and ethical rather than economically effective, as examples he cited the freezing of the salaries of MPs and ministers. "An attempt is being made to change the direction, but in our opinion this is not happening decisively enough. Of course, too abrupt a change hides risks, so we must act carefully and in a balanced way. However, we believe that significantly more could have been done so that the budget deficit did not reach 7.2 billion leva," he commented.
Velev said that the latest data show that by the end of the first quarter, Bulgaria was in first place in the European Union in terms of budget deficit. "This means that even before the current government took office, a deficit of 7.3% was already reported. If no measures had been taken, by the end of the year it would probably have been even higher, since in the second half of the year there are traditionally more expenses and less revenues compared to the first", he explained.
"Therefore, the efforts to limit the deficit to around 7-7.2 billion leva deserve recognition, but in our opinion a significantly better result could have been achieved," Velev is categorical.