Funds from RRP Narrowed the Deficit in July (Chart)

Bulgaria’s budget deficit narrowed slightly in July, according to preliminary data from the Ministry of Finance (MF) on the implementation of the Consolidated Fiscal Program (CFP). According to the data, the balance for July is expected to be 2.2 billion euros, or 1.7% of projected GDP. By comparison, at the end of June, the deficit stood at 2.4 billion euros, or 1.9% of projected GDP.

The improvement in the budget balance was influenced by the 0.9 billion euro payment received from the European Commission under the fourth request from the Post-Crisis Stability Program. Significant payments for investments under the Recovery and Resilience Facility are concentrated in August, and their implementation must be completed by the deadline set by the Recovery and Resilience Facility,” the Ministry of Finance stated.

Earlier on Tuesday, Deputy Prime Minister Atanas Pekanov announced that Bulgaria is expected to receive an additional 109 million euros this week under the National Recovery and Resilience Plan (NRRP). According to him, the country has so far received just over 70% of the total funds agreed upon under the NRRP.

My goal is to reach over 90 – 95%. Quite a few delays have accumulated over the years,” he said.

Key Budget Indicators as of July

Revenues, grants, and donations under the Consolidated Fiscal Program (CFP) as of July 2026 are expected to total 26.4 billion euros (53.2% of the annual target), or 2.7 billion euros (11.3%) more than in the same period of 2025.

This growth is driven by tax revenues, which increased nominally by 1.8 billion euros (9.3%), and revenues from grants and donations, which rose by 1.3 billion euros,” the Ministry of Finance explained.

Non-tax revenue is €0.4 billion lower than in the first seven months of 2025, mainly due to lower dividend income from state-owned enterprises in 2026 (because an interim dividend was paid in 2025).

Expenditures totaled 28.6 billion euros, representing 50.3% of the annual budget. By comparison, expenditures under the Consolidated Fiscal Program as of July 2025 were €25.9 billion. The increase is primarily in social and health insurance payments, including pension expenditures, as well as personnel costs, capital expenditures, and others.

The main reasons for the observed increase in expenditures are:

• an increase in pension expenditures following their indexation under the so-called “Swiss rule”;
• an increase in the minimum wage effective January 2026;
• an additional increase in salaries equal to the accumulated inflation rate for 2025, effective January 2026;
• a significant increase in capital expenditures, attributable to the implementation of investments and projects under the Municipal Investment Program and the National Recovery and Resilience Plan.

The portion of the Republic of Bulgaria’s contribution to the EU budget, paid as of July 31, 2026, from the central budget, amounts to 0.7 billion euros.

Translated with DeepL.