Bulgarian Economist Assures Eurozone Entry Remains Secure Amid Budget Challenges

Bulgarian economist Georgi Ganev assured that the country’s entry into the Eurozone is not at risk, as he spoke to BNR about the current economic situation. He expressed optimism that Bulgaria would meet the last required criterion based on data from November or December. Following this, an extraordinary report will be requested that will address the 2023 budget, given that the 2024 figures will not yet be available.

When discussing the closing budget year, Ganev acknowledged some uncertainties. He noted that challenges may arise for the finance minister before the year ends. However, he contested claims that revenue collection is performing poorly, except for potential shortfalls linked to the Recovery and Resilience Plan. He attributed part of the damage to the Bulgarian budget to actions by two political forces that he believes have caused significant issues.

Ganev pointed out that another revenue concern lies with the non-fulfillment of expected non-tax revenues, such as those from state-owned enterprises and property. He mentioned that around 300 million is anticipated to be added to the budget from these sources, which would help alleviate the shortfall, even if it doesn’t fully meet the expected non-tax revenues.

In an interview for the national radio, Ganev asserted that tax revenues are proceeding according to plan, indicating a near-complete execution of the budget. He expressed confidence that there would be no shocks in this area. He believes that any uncollected revenues by year-end will not pose a significant threat to the budget’s pledged buffers.

According to Ganev, social payments are also aligned with expectations, and there have been no surprises regarding higher expenses than anticipated. He did, however, express concern about potential issues in discretionary spending, particularly within the personnel costs of the state administration. He attributed this to several increases approved by the National Assembly at the start of 2024 that were not financially secured in the budget, specifically citing increases for the military, universities, and the Ministry of the Interior.

He noted that the projected revenues are set relatively optimistically, but if risks do exist, they primarily concern the possibility of non-fulfillment. Ganev emphasized that the risks are currently balanced. As of the end of September, the reported deficit stood at BGN 2.8 billion, with the Budget Law indicating a cash deficit of 6.2 billion leva. He expressed confidence that the government should be able to manage this shortfall in the coming months.

Ganev mentioned that the Ministry of Finance plans to submit a budget for 2025, which he deemed appropriate. On BNR, he criticized the Minister of Finance for attempting to safeguard low-level populist strategies through the budget in light of potential upcoming elections, calling the current situation complex.