Assen Vassilev inserts nearly EUR 6.5 billion in new debt in the 2024 Bulgarian draft budget

Bulgaria’s Finance Minister Assen Vassilev presented a draft budget for 2024 acceptable to meet the country's entry requirements into the Eurozone. It was prepared with a 3% deficit on cash and 2.9% on an accrued basis, which practically means that Bulgaria will meet the deficit criteria for entry into the currency union.

The budget sets a significant new debt ceiling of EUR 6.35 billion, compared to only EUR 3.75 billion taken in credit and withdrawn in 2023.

However, according to the minister, thanks to the expected growth of the economy, the debt-to-GDP ratio will hardly change.

Mr Vassilev revealed the main parameters of his draft budget to journalists at a press conference at the finance ministry premises.

Initially, the government official stated his intention to present the project after the proposed changes in the tax laws pass the first reading in the parliament, in order to see what the prevailing attitudes are before calculating the expected revenues.

Said amendments were never discussed in parliament this week though. Now the plan is to hold a discussion in the next two weeks and to submit the budget bill to the National Assembly (as the Bulgarian parliament is known) on 22 November. So, in all probability, the budget will be approved days before Christmas, at the earliest.

The draft budget was prepared based on a forecast of 3% inflation at the end of next year and a gross domestic product amounting to EUR 102.9 billion. Total planned budget revenues will be EUR 38.8 billion, and expenses – EUR 41.9 billion.

The Bulgarian minimum salary will rise to EUR 467.

It is planned to raise wages for part of the state administration staff, such as those working at the Ministry of the Interior. The idea is to distribute remuneration according to a methodology, which overcomes pay inequalities in the various structures of the administration. Total costs for civil servant personnel in the state administration will increase by EUR 1 billion.

There will also be an 11% increase in pensions from 1 July, according to the so-called Swiss rule.

The Finance Minister foresees about EUR 6 billion in capital expenditures or a growth of about 50% compared to 2023. About EUR 0.5 billion has been set aside in a special fund for municipal capital expenditures – to cover roads, water supply, culture,

So that localities can improve their infrastructure," said Vassilev.

He added that the funding for health care will increase by about EUR 0.5 billion. Bulgarian defence expenditure is expected to be a little over 2% of GDP.

Vassilev described the draft budget as "balanced".

It will allow us to fulfil the criteria for Bulgaria's membership in the Eurozone, and investments for the development of the Bulgarian state will go up by 50%," he added.

The minister expects about 10-12% growth of the average salary in Bulgaria next year as well.

Translated by Tzvetozar Vincent Iolov