Balgarianovinite.com The Fiscal Council Friday published its opinion on the 2026 State Budget Bill, saying that the revenue projections in the draft budget are overestimated and indicate a risk of non-performance of tax revenues. The rapid increase in public debt carries the risk that Bulgaria will lose its reputation as a country with low fiscal risk in terms of its indebtedness, while the rise in government spending shifts the balance between the public and private sectors in a way that could constrain economic growth.
Regarding the 2026 forecast, the Fiscal Council has developed three scenarios: realistic, pessimistic and optimistic. The baseline scenario is deemed realistic with a probability of 60%, while the optimistic and pessimistic scenarios are each assigned a probability of 20%. The main scenario for the development of the economy in 2026 is very close to that of the Finance Ministry, both nominally and structurally.
For 2026, the Fiscal Council forecasts nominal GDP growth of 6.5%, 2.7% real growth and a deflator of 3.7. Harmonized inflation is estimated at 2.9% annual average and 3.3% at the year’s end.
The Fiscal Council considers it necessary to create higher cyclical buffers (above the regulatory 1.5% of GDP). А structural buffer is also needed to provide funds for urgent structural reforms.
The rule that the size of the public sector should not exceed 40% of GDP, net of EU funds, is breached in 2026 and remains so in the following years.
The expansion of government spending in 2026, amounting to about 5% of GDP, alters the public/private sector balance and pushes the public-sector share higher, despite the very strong performance of the economy. The public sector reaches 45.8% of GDP, exceeding the 40% cap set in the Public Finance Act. Even taking into account funding under the National Recovery and Resilience Plan and the requirement for projects to be completed by the third quarter of the year, this expansion of the public sector is irrational. A large public sector will constrain both economic growth and the capacity for post-crisis recovery.
The Fiscal Council warns that general government debt is rising at a worrying rate, from 29% of GDP this year to 37% by the end of next year. Interest costs are also climbing, from EUR 0.5 billion in 2024 to EUR 1.7 billion in 2028. The sharp increase in the debt burden will push up the cost of debt financing on international markets, putting at risk Bulgaria’s reputation as a low-fiscal-risk country.
The Council reiterates the recommendations made during the 2025 budget process: revenue projections are overstated; automatic wage indexing in certain sectors should be removed as it generates budget imbalances; and the budget process must shift towards efficiency and the quality of public finances.
National Health Insurance Fund Budget Bill
The Fiscal Council notes that the authorities are pursuing a policy of increases across major spending categories. The planned rise is markedly higher than in previous years and for the first time exceeds EUR 5 billion, the largest increase on record. Although the sector is financially well resourced, optimizing the use of those funds is key to deliver better outcomes and ensure that the health system matches the population’s needs.
Public Social Insurance Budget Bill
The challenge of low pension incomes should be addressed through targeted policies, the Fiscal Council says. However, the preferred approach in recent years – generating a higher deficit financed through additional borrowing – is unsustainable in the medium term, as rapid pension increases exacerbate the shortfall in the Public Social Security Fund.
The Fiscal Council notes that spending pressures have led to a need to raise contributions, particularly to the Pensions Fund, where the deficit is largest. The country’s poor demographic situation will further increase this pressure. The Council recommends amending legislation that privileges civil servants, judges and police officers whose personal social contributions are paid from the state budget.
The Fiscal Council said the State Budget Bill for 2026 and the updated medium-term budget forecast for 2026-2028 have not been submitted to it and its opinions were prepared on the basis of publicly available documents.
Finance Minister Temenuzhka Petkova said on Friday that the dialogue within the National Council for Tripartite Cooperation had been restored and that another meeting with the social partners will take place in early December to discuss specific measures proposed by business and trade unions in order to reach a balanced solution acceptable to all.
Later in the day, GERB leader Boyko Borissov told reporters GERB will back down from raising the dividend tax and from a 2-percentage-point increase in the contribution to the Pensions Fund, instead proposing a 1pp rise. Plans to implement sales management software in retail outlets will be abandoned. Fiscal Council: Revenues in 2026 State Budget Bill Are Overvalued 2025 THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2025-11-28 17:18:25 Latest news World news Country news Most important news latest news most important latest of the day Justice Petar Nizamov Feathers Petar Nizamov- Feathers Justice bg iustitia.bg iustitia iusticia usticia investigation Burgas Bulgaria news news of the last hour news of the day news of today Bulgaria news The news from Bulgaria blitz news top news most important most commented latest news Boyko Borisov news weather coronavirus news news weather facebook youtube facebook instagram news today news of the last minutes news today today news news bg news leading news hot news bg news site for news all news news bg news of the last hour latest latest news bg news of today news today news today news of the last hour latest news today news bg news news 24 hours news vesti bg novini news world bird bg bivol bg bivol trud bg novini latest news today novinite bg news hello bulgaria political party coat of arms delyan peevski scandalous Bulgarian National Television Free Europe Television scandal exclusive live tv live right now tv tv online tv program bg live now tv news online tv online live court Burgas court Burgas district court Burgas court Burgas district court Burgas district court Burgas appellate court Burgas prosecutor Burgas prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Burgas district prosecutor’s office Prosecutor General Ivan Geshev Prosecutor Geshev Tsatsarov Ministry of Internal Affairs Burgas ODMR Burgas ODPR Burgas police Burgas district police Burgas prosecutor Tsatsarov SGS cases Varna court chairman of the SGS court decisions on civil cases decisions on cases Plovdiv court decision of the court decisions cases Varna court criminal cases district district court decisions work in the court SGS chairman of the SGS judges Sofia court post judges Plovdiv court Plovdiv judges Plovdiv Supreme Court Inspectorate Supreme Court Supreme Judicial Council lawyer lawyer criminal cases lawyer civil cases lawyer marriage cases lawyer administrative criminal law criminal process civil law civil process administrative law constitutional law
