The proposed 2027 budget shows a lack of political will for reforms, curbing persistent deficits and controlling the growing public debt, said Democrats for a Strong Bulgaria (DSB), part of the parliamentary group of Democratic Bulgaria.
The Ministry of Finance published the draft law on November 6, after Prime Minister Rumen Radev and Deputy Prime Minister and Finance Minister Galab Donev presented the main parameters of the financial framework. The draft provides for new government debt of up to €8.6 billion in 2027, while government debt is expected to reach 31.4% of gross domestic product.
The plans envisage new debt of €8.5 billion in 2028 and €7.9 billion in 2029. The government is projecting a deficit of 3.5% of GDP under the consolidated fiscal program on a cash basis. In its position, DSB calculates that the deficit on an accrual basis is 4.2% of GDP.
Criticism over the deficit and interest payments
According to DSB, the cabinet is missing the opportunity to use the projected economic growth to reduce the deficit and build up fiscal reserves. The party warns that, according to the government's calculations, interest payments will increase approximately threefold by 2029.
“An increasingly larger share of taxpayers' money will go toward servicing the debt, while less and less will remain for investment, public services and support in times of crisis,” DSB said.The formation also criticizes the measures to cover the deficit through taxation of excess profits and an increase in social security contribution thresholds. According to the party, these measures will reduce the net incomes of affected workers and limit companies' funds for investment and the creation of new jobs.
Dispute over administrative reform
DSB considers the proposal to cut fewer than 5,000 positions in the administration insufficient, as many of them are vacant. The party insists on a review of the functions of state structures, the removal of overlapping units and stricter control over operating expenses.
The position also states that the cabinet has included the listing of energy companies on the Bulgarian Stock Exchange in its program, but the draft budget contains no privatization revenue. DSB said it supports the offering of minority stakes in state-owned companies.
The party also supports a review of public spending in the TELK and personal assistance systems, but insists that it be carried out according to clear criteria and not restrict assistance for people who need it.
DSB accuses the government of making excuses by citing the legacy of previous administrations, while continuing the policy of high deficits. The formation insists that the cabinet present a viable plan to reduce the deficit and build up fiscal reserves.
Sources: bta.bg