The budget data sound predictably pessimistic to me. The budget was set too optimistically. I remain skeptical, because such a growth in VAT revenues is not possible. The problem is not only in the revenue side, but also in the expenditure side. Expenditures must be under much stricter control and more moderate. This was stated by former Minister of Finance Milen Velchev in the program “Face to Face“ on BTV.
I hope that measures will be taken to keep the deficit within the legal framework, he added.
It is entirely possible that on a cash basis they will manage to enter within 3%, but this will be based on a very serious cut in capital expenditures, Velchev admitted. He predicted that some of the planned projects will be dropped due to impossibility of implementation.
The financier also commented on the benefits of introducing the euro in Bulgaria. “Bulgaria will leave the side alley of the highway and enter the very highway of European politics. It will be at the very core of the EU, where decisions are made. Decisions there are made unanimously and we will be able to defend our interests“, he summarized.
Prices and inflation go hand in hand. Our membership in the eurozone will lead to more investments, more jobs, higher wage growth. This will be a double-edged sword, because inflation will grow. This is not the worst option for economic development, explained Milen Velchev.
Pensioners will be protected, because according to the existing law, pensions increase every year. The demographic situation is difficult, the situation will continue to worsen. Serious reforms are needed in the pension system, and in particular in the second pillar, so that people can accumulate savings. The retirement age must continue to increase, because life expectancy is also increasing. This will be a major burden on the budget in the future, whatever we do, the question is that it should not interfere with other government policies, the former finance minister also said.