Bulgaria’s Fiscal Council recommends that the draft 2027 budget be supplemented with permanent expenditure reductions amounting to around 1% of GDP, equivalent to approximately EUR 1.4 billion in an opinion on the draft State Budget Act for 2027 and the Updated Medium-Term Budget Forecast for 2027–2029.
The draft 2027 budget and the Updated Medium-Term Budget Forecast for 2027–2029 acknowledge the need for fiscal consolidation and formally follow the corrective path set by the Council of the European Union. However, the adjustment relies on a one-off tax, the conclusion of the Recovery and Resilience Plan (RRP), the defence escape clause, and expenditure ceilings that are not backed by concrete measures, the Fiscal Council notes.
Under these circumstances, the excessive deficit would be corrected only in the final year allowed, with a minimal buffer against the cyclical slowdown that the Fiscal Council expects in 2028. The Council assesses that the budgetary framework does not provide sufficient assurance that the corrective path will be followed.
According to the opinion, the revenue measures included in the draft budget are overestimated, with the Ministry of Finance projecting EUR 1.926 billion, compared with approximately EUR 1.30 billion estimated by the Fiscal Council. The Council notes that 42% of the projected revenue comes from a one-off tax on excess profits, expected to generate EUR 800 million, compared with approximately EUR 211 million according to the Fiscal Council’s simulations.
For 2028–2029, the Council estimates that revenues from social security contributions and electronic invoicing are overreported by EUR 0.6–1.0 billion annually.
The Fiscal Council points out that the projected reduction in expenditure under the Consolidated Fiscal Programme, from 43.5% to 39.6% of GDP in 2027, does not represent genuine fiscal consolidation. Instead, it results from the conclusion of the RRP and growth in nominal GDP. In nominal terms, total expenditure declines by EUR 0.8 billion, but only because expenditure financed through EU funds accounts falls by EUR 3.5 billion, while nationally financed expenditure increases by 5.5%, or EUR 2.7 billion.
One-off payments to municipalities and the Road Infrastructure Agency, together with national financing under the RRP, amount to approximately EUR 2.15 billion. Excluding these payments, the underlying deficit for 2026 stands at around 3.9% of GDP, meaning that the projected deficit of 3.5% for 2027 does not constitute genuine consolidation, the Fiscal Council observes. According to its opinion, if the identified risks materialize, Bulgaria’s budget deficit will remain between 3.4% and 4.4% of GDP through 2029.
In addition to permanent expenditure measures, the Fiscal Council recommends maintaining a buffer of at least 0.5% of GDP below the net expenditure ceiling in each year, so that compliance does not depend on a single measure or the defence escape clause.
The Council also recommends reconsidering the one-off tax. If the tax is retained, the resulting revenue should be used exclusively to reduce the deficit, and its treatment should be clarified with the European Commission, the Fiscal Council states.

Fiscal Council: 2027 State Budget Should Be Supplemented with Permanent Expenditure Reductions Equivalent to 1% of GDP THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-11-12 02:15:44

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