Bulgarian economist criticizes Ministry of Finance projections

Economist Lyuboslav Kostov has challenged the accuracy of the Bulgarian Ministry of Finance's economic forecasts. According to Kostov, the Ministry underestimated the nominal size of the country's GDP for 2026 by approximately 10 billion BGN (5.2 billion EUR), projecting a much smaller increase during the summer budget preparations than what is now anticipated.

Kostov attributes this discrepancy to significantly underestimated inflation. While the spring projections set the price level deflator at 5.2%, current assessments place it at 9.1%. Despite this, real economic growth is expected to reach 3%, which is 0.4 percentage points higher than previous spring expectations.

Furthermore, Kostov disputes the likelihood of the projected 5.7% budget deficit. Official data shows the deficit stood at 2.8% of GDP through the end of September, with a cumulative negative balance of 3.64 billion EUR for the first nine months. He argues that reaching a 5.7% deficit would require the state to spend over 5 billion EUR in the final three months of the year, a figure he describes as absurd given the preceding nine months of spending.