If the minimum wage is not raised, there will be protests. This is described in the Labor Code, it was voted in the National Assembly with absolute consensus. Luboslav Kostov, Chief Economist of KNSB.
According to him, the maximum insurance income distorts the tax system. "The employment rate is at record high levels - 77%. The unemployment rate is at its natural rate. The main driver of growth is domestic demand, and there is no investment. 60-70% of this growth is the result of household consumption, which occurs when incomes rise. At the fiscal level, there is a problem, it is a matter of priority to solve it. We insist that staff costs be raised by 10%, and where they will go should be decided by the specific sector, according to the performance of the employees and their certifications. For the second quarter, the average salary has grown by over 17%, which comes from the private sector," he commented.
The economist pointed out that in the mythology of calculating the poverty line, the base year is 2022, which is a problem because then inflation has started to rise. "We want not to take its general level, but that of the small consumer basket. "Obviously, people who are on the poverty line buy the bare necessities," the expert opined.
In his words, the flat tax no longer works because it has not reduced the shadow economy, nor inequalities. "The focus has shifted to indirect taxes. Therefore, the main burden is borne by society. By October 30, the budget for 2025 should already be in the parliament. 14 billion were the expenses for salaries 3 years ago, currently they are 18 billion. In total, the budget is 80 billion, which is 9.5% of GDP. It grew by about BGN 40 billion in nominal terms, so the costs are nominal," Kostov pointed out.