Almost all countries worldwide have accumulated public debt. The most powerful and highly developed countries are the ones with highest volumes of public debt such as the USA which owes global investors several trillion USD. However, the authorities in Washington and the banks are not worried about that fact. The financial and investment companies continue to buy large quantities of US government bonds. They invest in the US economy, simply because they know well how powerful that country is and that a Black Tuesday when the USA would declare a default and go bankrupt is unlikely to come soon. On the contrary, Bulgaria's neighbor Greece, whose public debt exceeds 160% of its gross domestic product, does not stand big chances of paying off those debts and is more likely to enter such scenario.

Public debt is a term in economics. Many people do not understand that term well, but economic experts make various analyses and conclusions from that figure. For instance, they find out how borrowed money is spent.

Currently, Bulgaria's public debt amounts to EUR 13.7 billion. It increased with over EUR 2 billion in 2016 only, which is a reason for concern. Most of Bulgaria's new public debt was used to pay the depositors in Bulgaria's fourth largest bank Corporate Commercial Bank which bankrupted for political and economic reasons.

A lot of money was spent on the construction of several sections of motorways. The salaries and state pensions in Bulgaria are meager, but the social sphere did not receive more money, although the country's budget closed 2016 with a surplus. That is why one of the most prestigious international consultant companies COFACE raised Bulgaria's rating, thus sending a message to potential buyers of Bulgarian government bonds, that the risk to invest there is worthy. Bulgaria has the third lowest debt/GDP ratio in the whole EU and places after Estonia and Luxembourg in that ranking. The debt/GDP ratio in Bulgaria is 28.7%, which is an exceptionally good achievement and encourages foreign investors to buy government bonds. In fact, the lawmakers banned Bulgaria from issuing new debt on the international financial markets in 2017 and government bonds will be sold to local investors only, if necessary. Apparently, there is a link between that decision and the country's fiscal reserves amounting to EUR 6.5 billion and the 2016 budget surplus amounting to EUR 750 million.

However, Bulgaria is heading towards early Parliamentary elections this spring. According to preliminary public opinion surveys, electoral support towards the two main political parties the leftist Bulgarian Socialist Party and the center-right GERB has almost reached parity. If the socialists place first at the forthcoming elections and become in charge of the country's government, it would not be surprising if they start spending more money on social policies and soften the restrictions related to spending of public financial resource. Apparently, it would influence the country's foreign debt, domestic debt, fiscal reserves and budget surplus. Moreover, according to all economic and financial experts, the growth of Bulgaria's GDP in 2017 will slow down. No one knows what future holds, but that country has to follow a moderate and cautious financial policy more than ever.

English version: Kostadin Atanasov