Bulgarian fiscal and economic forecast disputes

Economic experts have challenged the Bulgarian Ministry of Finance regarding its 2026 projections. Economist Lyuboslav Kostov argued that the Ministry underestimated the nominal GDP by approximately 10 billion BGN, citing a significant discrepancy in inflation expectations where the price level deflator was projected at 5.2% but assessed at 9.1%.

Kostov also disputed the likelihood of the projected 5.7% budget deficit, noting that the deficit stood at 2.8% of GDP through September. He characterized the requirement to reach a 5.7% deficit as “absurd” given the spending patterns of the preceding nine months. Supporting this skepticism, Lyubomir Karimanski, a member of the Bulgarian National Bank Governing Board, stated that the deficit is unlikely to exceed 5% due to the state’s limited capacity to absorb capital expenditures.

Concerns have since extended to the proposed 2027 budget plan. Economist and former Deputy Prime Minister Lydia Shuleva argued that the plan to reduce the deficit to 4.3% does not indicate a stable recovery of public finances, as state debt continues to rise and the strategy relies heavily on one-time revenues.

Adding to these critiques, former Economy Minister Nikolay Vasilev has advocated for a shift toward budget surpluses to drive economic growth. Vasilev expressed concern regarding the projected 4.3% deficit for 2027, noting that while governments often report a deficit of approximately 3%, the actual figure could reach 8% depending on accounting practices. He argued that Bulgaria’s highest economic growth periods occurred during budget surpluses, which allowed for significant state investment. Vasilev further proposed that the country aim for a surplus every year for the next seven years to manage rising national debt.