The government of PM Boyko Borissov has adopted an update of the public budget for this year, the national draft budget for 2016, new versions of the budgets for health insurance and the pension fund for next year all at once.

But first let's start with a failure. Changes in the 2015 budget actually recognize that one of the most controversial restrictive measures that envisaged a 10- percent cut in expenses for salaries in the public administration, has actually failed. This measure was strongly criticized as inappropriate and unrealistic during its adoption last year. Now additional funds allocated to various ministries and other public administration services aim to correct this error. The government actually showed realism and tried to change the situation.

The plans of the Borissov Cabinet to increase public spending next year due to more revenues to state funds deserve attention. Public spending rises by 1 billion euro in comparison to the current year. Deficit is expected to emerge but it would gradually decline and the debt of the country would not reach the level expected in the medium-term macroeconomic forecasts of the Ministry of Finance.

Who will benefit the most from increased opportunities for public funding? A number of infrastructure projects will receive a breath of fresh air by the Cabinet. More money will be spent for public health as Bulgarians desperately need better healthcare. A number of public institutions will also receive more money for salaries, which are much smaller in comparison to those in the private sector. The Social Security Fund will receive more money for pensions, which is a logical move keeping in mind the ageing Bulgarian population.

Demands by magistrates for more financing and higher salaries that would provide better protection from corruption met strong resistance and sparked fierce controversy. In the end, however, the Justice system received the money it wanted. More money will also be spent for the army and police. Perhaps finally the military will be able to buy new equipment to replace outdated weapons and combat vehicles. The police also get a chance to modernize and reform, which is something that has always failed to happen so far, as the reason is said to be the lack of funds.

This generosity can be described by some observers as populism and demagogy, but the reality is that it would not result in new debts, nor does it threaten to increase the budget deficit. Although being relatively modest, increased public spending reflects the desire for economic, political and social stability, and speaks about the confidence of the current government that they are on the right track and that there are no hidden traps on the way.

These are the intentions of the government with the adoption of the package of financial documents that must be approved by parliament in order to become official laws. There should be no unpleasant surprises there, so from a macroeconomic point of view, 2016 seems relatively calm for the Bulgarians.

English: Alexander Markov