The draft budget for 2027 is “unconditionally the best budget of the past 5 years.” This was stated by Vasil Velev, Chairman of the General Assembly of the Bulgarian Industrial Capital Association, to “Taralezh” following the presentation of the financial framework at the University of National and World Economy.
According to him, presenting the budget to students, lecturers, employers, trade unions and representatives of institutions is a good sign, but it does not eliminate the subsequent discussion in the National Council for Tripartite Cooperation.
The deficit and measures for businesses
Velev’s main argument is the planned reduction of the budget deficit. For 2027, a negative balance of 3.5% of gross domestic product has been set, compared with 4% for the previous year and 5% for the current year. He described this as a reduction of 1.5 percentage points and said that in 2028 there is a real possibility for the country to return to the permissible limits.
Velev linked the budget to a transition toward economic growth based on investment rather than on consumption financed through deficits and loans. Among the positive measures, he pointed to accelerated depreciation for high-value-added production, investment incentives, increased spending on innovation and the development of industrial zones.
According to him, the draft does not provide for an increase in the main taxes and rates. For small businesses, changes have been proposed, including a higher threshold for VAT registration and a higher materiality threshold for fixed assets.
Cuts to the administration
Administrative operating costs are expected to be reduced by 10%. Velev also noted that the number of management positions should fall from 1,868 to 1,723, while staffing levels in the central administration should be cut by 5,042. The Interior Ministry is planning to eliminate nearly 2,000 positions.
He gave the example of the Interior Ministry’s support services, which serve the police, border police and fire service separately. According to him, some of these units could be merged without directly affecting employees who perform operational functions.
Velev also defended a practical approach toward employees who receive both a pension and a salary. In his words, the public sector is overstaffed, while industry is experiencing a shortage of workers and specialists.
Social payments and new debt
The draft includes increases in social payments, measures to encourage the birth rate and tax relief for working parents. The minimum wage is expected to increase from €620 to €660.
Velev nevertheless described the new debt as a negative factor, saying it would amount to around €8 billion. He also pointed to planned defence spending of €418.4 million, whose increase he does not approve of.
The Chairman of the General Assembly of BICA also said that uncertified expenses amounting to €1.8 billion had been left for settlement in 2027. Despite this, he viewed positively the fact that the government is not proposing an increase in the main taxes.