Last week, Minister of Finance Assen Vassilev presented the parameters of the budget for 2024. It became clear that this year's planned revenues will remain unfulfilled by BGN 2.3 billion, and expenses by BGN 1 billion. The expected deficit increases by over BGN 1.2 billion to 3% of GDP, but the plan of the state for the next year will be fully aligned with the country's ambition to join the Eurozone from January 1, 2025. That is why the calculations were made with an assumed 3% deficit. Revenues are expected to reach BGN 77.6 billion, and expenses - BGN 83.8 billion. The expected growth of the economy is 3.2%.

Incomes and investment policy stand out as priorities of the budget. Health care costs are expected to increase by BGN 1.1 billion, which is the rise in the budget of the National Health Insurance Fund.

The projected income growth is higher than annual inflation, forecast to stand at 4.8%, as at the end of 2024 it is expected to slow down to 3%.

A bit over 2% of GDP is set to be spent on defense, as required by NATO membership rules.

"There is no danger that the budget would go beyond the limits of the 3-percent deficit, as this would be a problem,” Prime Minister Nikolai Denkov said in an interview with BNR. “Income and expenses should be discussed by experts. I have seen how these discussions go on. There is a clash interests, but in the end the result is good.”

The prime minister said that the cabinet does not underestimate capital expenditures and the budget planned for them next year has been increased to the amount of 12 billion BGN. The prime minister defined as false the claims that there was a lack of funds for the municipalities:

"However, these funds must be voted for the municipalities when they have specific projects that will be beneficial to the people,” Denkov pointed out and focused on a topic that also directly affects the citizens. “We believe that the funds for raising incomes are extremely important as one can't live well in this country if incomes are low. The result of the budget policy applied for 10 years by GERB and its supporting parties is that Bulgaria is at the bottom of the EU chart in terms of minimum wage and average incomes. That's what we want to overcome because you can't solve the demographic crisis if people have low incomes."

However, financiers and economists in the country are skeptical about the sustainability of such a budget, if it is adopted.

"We are observing a mechanism of forming the budget, which is based on mutual wringing of hands, on secret agreements and following the interests of certain groups that insist on taxes or spending,” financier Prof. Gancho Ganchev says. "A hidden way of forming a budget that ultimately has no long-term goals."

The expert shared details about the economic framework, in which the country functions.

"Our major partner - Germany, is in a recession. Bulgarian exports and growth are affected by this. It is wrong to blame the government for the fact that growth has fallen or that inflation is high. 90% of the processes are determined from outside. In the conditions of the currency board, we have no real mechanisms to fight inflation. So, it's about demagoguery and a completely populist approach."

Economist Kuzman Iliev defined the state budget as the most socialist budget in Bulgaria's recent history:

"From the point of view of expenses, Assen Vassilev is creating a budget everyone dreams of - a lot for everyone. However, in the revenue part we see many difficulties for those who make the added value," Kuzman Iliev says. According to him, "when you start panicking that you can’t implement the budget, you start imposing taxes and administrative burdens to fill the treasury".

Speaking about the deficit, Iliev said:

"Of course, a huge hole will open. We have a hole this year and next year we are betting on a huge deficit. There is no logic in this. You can't inflate the expenditures and say that you don’t know what will happen with the revenues."

The draft law on Budget 2024 is expected to be submitted to the National Assembly on November 14. We are yet to see whether and by whom it will be supported.

Compiled by: Yoan Kolev / based on interviews of Diana Yankulova and Diana Doncheva, BNR-"Horizont"/

English publication: Al. Markov

Photos: BTA, BGNES, personal library