Bulgaria’s budget deficit swelled significantly in August, when it is expected to have reached €3 billion, or 2.4% of projected GDP. This is according to preliminary estimates published today by the Ministry of Finance (MF), which attributes the increase to payments for investments and projects under the Recovery and Resilience Plan (RRP).
The deterioration in the budget balance on a monthly basis in August is primarily due to the concentration of substantial investment payments under the RSP in order to meet the eligibility deadline for activities – August 31, 2026 – and the disbursement of significant expenditures for their implementation. “It is expected that R&S Program expenditures on a cash basis will continue to put pressure on the budget deficit until the fifth payment is received from the European Commission,” the Ministry of Finance explains.
In other words, the effect seen in July has been reversed: at that time the fourth payment received from Brussels narrowed the deficit while now the accelerated spending ahead of the Mechanism’s deadline has widened it again – in anticipation of the offsetting effect of the fifth payment.
Key Budget Parameters as of August
Revenues, grants and donations under the Consolidated Fiscal Program (CFP) as of August 2026 are expected to total €30.1 billion (60.7% of the annual target), or €3.2 billion (11.9%) more than in the same period of 2025.
This growth is driven by tax revenues, which increased nominally by €2.2 billion (10.1%) and revenues from grants and donations, which rose by €1.5 billion,” the Ministry of Finance stated.
Non-tax revenue is €0.5 billion lower than in the first eight months of 2025, mainly due to lower dividend income from state-owned enterprises in 2026 (as an interim dividend was paid in 2025).
Expenditures under the Fiscal Framework (including Bulgaria’s contribution to the EU budget) amount to €33.1 billion, which is 58.3% of the annual estimates. By comparison, expenditures as of August 2025 were €29.6 billion. The increase is mainly driven by social and health insurance payments, including pension expenditures, as well as personnel and capital expenditures.
The main reasons for the observed increase in expenditures are:
an increase in pension expenditures following their indexation under the so-called “Swiss rule” as of July 1, 2025, and July 1, 2026;
an increase in the minimum wage as of January 2026;
an additional increase in wages equal to the accumulated inflation for 2025, effective January 2026;
a significant increase in capital expenditures due to the implementation of investments and projects under the Public Investment Program and the Municipal Investment Program.
Bulgaria’s share of the contribution to the EU budget, paid as of August 31, 2026, from the central budget, amounts to €0.8 billion.
Simona Gotsova 
