Bulgaria’s Ministry of Finance: Minimum Wage will remain at BGN 710 until 2025

Finance | April 13, 2022, Wednesday // 09:08|  views


The minimum wage will remain at the level of BGN 710 (EUR 363) until 2025, it is clear from the draft of the new medium-term budget forecast of the Ministry of Finance. It envisages a lower rate of annual growth of pensions - from July 1, 2023, it will be 9.1 percent, and in the coming years, the indexation will be respectively 6.9 and 5.4 percent.

The project stipulates that the amount of the minimum wage of BGN 710 will be maintained until 2025.

In his report, Deputy Prime Minister and Minister of Finance Asen Vassilev noted that in the period 2023-2025 there is a continuing trend of increasing debt, and is expected to reach a level of BGN 54.2 billion by the end of 2025.

The ratio of government debt to GDP is expected to continue growing to 26.4% in 2023, 28.0% in 2024 and 29.5% by the end of 2025, the project said.

In 2022, Bulgaria's GDP growth is expected to reach 2.6%.

The expectations for the unemployment rate are that it will follow a steady downward trend in the period 2022-2025, and is projected to decrease from 5.0% in 2022 to 4.2% in 2025.

At the moment, the expectations are for a further rise in the price of oil and non-energy raw materials in 2022, which will start to slow down in the second half of the year. Accordingly, the growth of the general level of consumer prices will continue to accelerate until the third quarter of the year, after which it will begin to slow down, and inflation at the end of 2022 will reach 10%.

The leading contributor to this will be food, whose price will accelerate to 16.4% on an annual basis in December. Energy goods will also make a positive contribution, with transport fuel prices expected to rise by 25.1% by the end of the year. The components of core inflation will also make a significant contribution, due to the expected side effects of the accelerated rise in energy prices and difficulties in supply chains. Services will rise by 8.1% at the end of 2022, and non-energy non-food products - by 6%. The average annual inflation in 2022 is projected at 10.4%.

In line with the expectations for downward price dynamics in all major commodities in the period 2023-2025, as well as with the exhaustion of the observed side effects, the inflation rate in the country is also expected to continue to slow to 3.1% at the end of 2023, and 2.4% and 2.2% at the end of 2024 and 2025, respectively, reported by the Finance Ministry and said that energy products will have a negative contribution due to the expected reduction in the international price of oil, which will led to cheaper car fuels.

The average annual inflation in 2023 is expected to be 5.1% and will continue to slow to 2.7% in 2024 and 2.3% in 2025.

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