“Realistic Expectations”: Parliament Approves a 5.7% Budget Deficit for 2026

The National Assembly approved a budget deficit of 5.7% for this year. This took place during the second reading of the state budget bill on Friday.

A day earlier lawmakers held discussions focused solely on the budget parameters, which consisted mainly of criticism of the ruling party and the presentation of their own proposals; today they are voting on the various articles of the bill. So far lawmakers have approved the budgets for the judiciary, the National Assembly, the Office of the President, the Council of Ministers, the National Audit Office, the Constitutional Court, the Ombudsman, various ministries, state agencies and commissions.

Following the conclusion of the debates Deputy Prime Minister and Finance Minister Galab Donev called for “more realistic expectations” regarding the budget.

I call for realistic attitudes and expectations regarding the 2026 budget from the very beginning of the budget process, because the most significant aspect of this budget is that it brings to light the accumulated liabilities and flawed management decisions,” Donev stated.

According to him there is “courage and ambition” in the budget because it puts an end to “unwise financial decisions” and changes course: “from short-sighted budgets focused on the next election to budgets with a vision for progress.”
None of the opposition’s proposals regarding the macro-framework were approved.

“A Spectacle for the Sake of It”

The behavior of some of you – for whom it was important to turn the budget debate into a “spectacle for the sake of it” – is understandable,” Donev continued.

In his words the budget process is a fertile ground for political maneuvering and lies. “However it is unacceptable to exploit the concerns of vulnerable groups in society and turn them into political targets. And let us not fool ourselves — there is no way people who do not pay their own bills can properly manage the state’s budget,” he commented.

As for the 2027 budget, Donev simply stated:

We have a lot of work ahead of us on the 2027 budget, and it starts today.”

We remind you that next year’s budget will be key in the excessive deficit procedure that the European Commission (EC) launched against Bulgaria in early June. After the finance ministers of the European Union (EU) also approved the decision to launch the procedure it became clear that our country has until October 15 to present measures to reduce excessive spending. It was precisely the accelerating growth in public spending in recent years that prompted the EC to initiate this corrective procedure.

Parameters

Here are the parameters of the macroeconomic framework for this year’s budget:

• GDP growth – 2.6% in 2026, 2.5% in 2027 and 2.5% in 2028;
• Average annual inflation: 4.3% in 2026, 3.8% in 2027 and 2.5% in 2028;
• Deficit: 5.7% of GDP in 2026, 3.8% in 2027 and 3% in 2028;
• Revenue: €49.6 billion;
• Expenditures – €56.8 billion;
• Public debt – a total of €37.7 billion, or 30.1% of GDP by the end of 2026;
• Minimum level of the Fiscal Reserve as of December 31, 2026 – €2.6 billion;
• Capital Program – €9.3 billion, of which €4 billion is national funding and €5.3 billion is European funding (including under the Recovery Plan).

Translated with DeepL.