The inflation of the expenditure part of the budget is a result of political pre-election populism. This is how the executive director of the Association of Industrial Capital in Bulgaria (AIKB) Dobrin Ivanov commented on Darik radio about the hole of BGN 18 billion, which is forming in the budget for 2025, if urgent measures are not taken.
“We will vote early for the seventh time in three and a half years. Lack of regular management. We did not have a stable governing majority and we are constantly in an election campaign where politicians are fighting for the votes of the voters. Thus, the minimum pension was increased and we reached the situation where about 50% of pensioners receive the same pension, and a minimum one, without taking into account the social security contribution. Thus, the costs of pensions and social benefits increased to very high levels. Free textbooks were distributed to all students, child benefits were increased, many other social benefits were carried out, which increased the expenditure part”, explained the financial expert.
He stressed that social benefits and income should be increased, but this should be in line with income.
A week ago at a press conference, acting finance minister Lyudmila Petkova warned that if no measures are taken, the deficit in the budget for 2025 is shaping up to be around BGN 18 billion, which is around 9% of GDP. Her words were about the expiry of the deadline for submitting next year's budget to the parliament - October 31. It turned out that at the moment the official cabinet is not ready to propose a framework for the financial plan, and is just starting consultations with the parties in the parliament, which are in an election campaign, with the employers and the unions.
When asked what is happening with the budget for next year, Ivanov emphasized that at the moment only a “fragmentary” information.
“No one knows yet because we don't have the macro framework and we don't have an accurate forecast. What the finance minister did at the press conference was point out that we have a problem. A problem, because if the legal norms are respected and the expenses that were voted by the people's representatives in the laws are taken into account, and a normal growth of the economy, a normal increase in revenues is predicted, we will have a huge deficit in the amount of BGN 18 billion. And in fact, the finance minister initiated the debate with the public, the debate with the future people's representatives in the parliament and the political parties on measures to limit these damages,” explained Dobrin Ivanov.
He emphasized that Bulgaria has strategic priorities, one of which is our membership in the Eurozone.