Bulgaria Welcomes 2025 Without Budgetary Interruptions, but Challenges Ahead
Bulgaria marks the new year without a fresh budget, nor an extension of the existing one. This unprecedented scenario, set against shrinking public finances, has financial experts divided on the potential impacts.
Financial correspondent Nelli Todorova of Nova TV revealed, "In the initial drafts for 2025, we faced a possible 6% deficit, which later dropped to a more manageable 3% on paper." She added that the country has not attempted budget equilibrium for years, with surpluses at year-end barely discussed.
Todorova noted that without an extended law, certain social payments, like minimum pensions, could face disruptions, but some analysts remain hopeful of avoiding such a stalemate.
The new year starts with budget spending limited to the 2024 budget’s January allocation. This means increases in pensions, effective since July 2024, won’t be reflected in January 2025 spending.
Debt plugging holes is a growing concern. Todorova warns that Bulgaria’s public debt is set to double by 2028 from its 2023 level of 42 billion levs. She argues that borrowing should fund investments that will later generate revenue.
State administration staff has increased 2% over the last decade, a stark contrast to the 11% population decrease. Todorova questioned the necessity of all state systems receiving increases.
Notably, the Ministry of Interior (MVD) projects a 40-56% salary increase, while the number of personnel has decreased over the same period. Significant salary hikes are also anticipated in the defense sector.
Crucially, without a budget or extended law, Bulgaria’s state finances can sustain only until March. The Budget Committee resumes deliberations on tax laws and the 2025 budget on January 7.
