The draft state budget for 2027 could lead to recession and serious financial problems, the leader of „We Continue the Change“ Assen Vassilev said in an interview with bTV. He described the financial framework as a „budget of financial collapse and catastrophe“.
The draft was presented by the governing parties on November 6 at the University of National and World Economy. They described it as a „budget of coming to one's senses“, but according to Vassilev, the parameters set out in it are based on overly optimistic expectations.
Criticism of the Inflation Forecast
One of his main arguments concerns inflation. According to him, the 2026 budget initially included a deflator of 5.2 percent, while the expected figure for the year has already risen to 9.1 percent. Nevertheless, the forecasts for the following years once again envisage inflation easing.
Vassilev described this forecast as overly optimistic against the backdrop of rising natural gas, electricity and diesel fuel prices. According to him, higher costs are already affecting production, including bread production.
Incomes and Consumption
The former finance minister also challenged the projected increase in incomes. He gave the example of a salary of 1,000 euros, which according to the parameters set out in the budget should rise to 1,050 euros next year, to 1,060 euros the year after and to 1,061 euros in the following period.
According to Vassilev, this growth is lagging behind inflation and means a decline in purchasing power. He also questioned the forecast of an approximately 8 percent increase in consumption.
He also said that the planned increase in the minimum wage is lower than necessary and will not allow the expected levels to be reached by the end of the forecast period.
The Dispute over Investment
Vassilev also criticized the investment component of the budget. According to him, public investment in 2027 is planned to be 4 billion euros lower than in the current year, representing a decline of approximately 40 percent.
At the same time, the macroeconomic forecast envisages the total decline in investment being around 1 billion euros. According to Vassilev, this means that the private sector will have to make up the difference with around 3 billion euros in additional investment.
He questioned whether businesses would be able to provide these funds given the planned excess profits tax, high energy costs and the expected contraction in consumption.
„There is no way these additional 3 billion euros in investment can materialize“, the leader of „We Continue the Change“ said.As additional risks, Vassilev pointed to delays in investment under the Recovery and Resilience Plan and problems with the municipal investment program.
The draft 2027 budget has been published for public consultation until November 10. The European Commission's official assessment of the draft budgetary plan is expected on November 24.