With this budget frame we run the risk of doubled long in 10 years

In 2024, Romania skipped the 50% government debt, becoming the EU country with the highest increase in the debt to GDP since the beginning of the pandemic to the present. High budget deficits-levels of 6-9% of GDP-raised the duty of Romania from 35% in 2019 to 52% in 2024, with a forecast of nearly 60% in 2026. In just a few years, Romania will most likely have a higher debt than Germany. Against this background, Bulgaria is relatively good – it holds a deficit about 3 percent, but is faced with the danger of entering a period of serious rise in debt levels. Is it possible within a decade of government debt in Bulgaria to follow the example of our northern neighbor and reach up to 50% of GDP?

A few days ago, Bulgaria adopted its national medium-term fiscal-structural plan for the period 2025-2028, which is the basis of the reformed EU Economic Management Framework and gave not only the direction of public finance by 2028, but also an assessment of the development of the debt until 2038 in various scenarios. According to this plan, in the basic scenario (unchanged in the structural primary balance), the debt will reach 55.4% of GDP in 2038, and in the case of fiscal correction scenario (ie correction in the structural primary balance) the debt will be 45.3% of GDP in 2038. A clear request for increase and practically doubling from the current level (24-25% of GDP) of public debt in the next 10-12 years.

This framework shows that the debate on the state budget, currently being considered in parliament, is extremely important. The evaluation of the fiscal-structural plan is fully focused on the growth limit of the so-called net primary costs.

The rule is the growth of the net costs to follow the growth of the potential GDP and the GDP deflator – in another way, the increase in costs must be linked to the nominal growth of the economy. This is definitely not respected with the budget project for 2025. The current costs of the budget proposed budget is the money for salaries, maintenance, subsidies and pensions – increased by 16.4% against the background of nominal economic growth below 7%. The scale of the difference is 3% of GDP, that is, with so many percentage points, the share of current costs is rising to the country's economy.

The swelling of current state food, led by the over -increase in the salaries of police officers and the military, is the big problem in the budget And it must be reviewed between the first and second reading in parliament. Otherwise, we risk deviation from the fiscal-structural plan and subsequent pressure to increase the tax burden-even beyond the already foreseen increase in insurance weight in 2027 and 2028. Notice that the forecast for the growth of the network is an average of the largest year in the period 2025-202. We are on the way. An attempt to renovate this discrepancy, with an almost freezing cost of salaries in the midst of 2026-2028 (an increase in a year of about 1.5%), which is almost impossible, taking into account the automatic wage rules in the power agencies, but in a more overall plan and the inevitable annual annual plants and the annual plan and the unavailable annual planning.

However, this is not all. The other big problem with the budget is the pouring of BGN 7.2 billion (such as capital) into drilled state -owned companies and, accordingly, the extremely high growth of government debt. The new debt of BGN 18.9 billion sets far beyond the necessary funds to finance the deficit and expected debt payments during the year. The difference is the BGN 7.2 billion in question, with which the state will attempt to manage, through state -owned companies, make different investments without going through the budget and weighing (accounting) of the deficit.

There is no impression that two budget projects are already planning huge funds for BDB. First, the official government's project has set BDB's involvement in the extravagant idea of ​​tax amnesty, and now the regular cabinet offers even greater support for the bank, pursuing « boosting the BDB financial capacity in financing national priorities and sectors of the economy. »

This general wording in practice says that the bank will be used as a shade budget (under a trait) to pursue various policies.

The intended capital injections for BGN 7.2 billion will weigh an extraordinary and compared to the fiscal and structural plan. Such extraordinary schemes are not embedded there. Therefore, there is a big difference in the forecast for government debt. According to the fiscal-structural plan, the debt should be 30-33% in 2028 (depending on whether there is a deficit correction), and according to the medium-term framework to the budget project, the debt will reach 36% in 2028. The difference of over 3 percent points comes mainly from this (too) controversial operation. Here, as with the rule of cost growth, we have a deviation from the plan in the first year.

The overall review of the fiscal-structural plan for the period 2025-2028. It clearly shows that they are necessary far bolder budget measures so that we can enter normal frames:

If all this is overlooked, we enter a path that leads us to a higher tax and insurance burden for entrepreneurs, investors and workers, as well as a serious increase in government debt in the coming years.