Bulgaria Faces Structural Budget Deficit, Economist Warns

Economist Dimitar Chobanov has warned that the current policies are pushing Bulgaria’s budget toward a structural deficit that is already becoming apparent. He told the Bulgarian National Radio that addressing this issue requires stricter control over expenditures rather than relying solely on raising taxes or administrative fees.

Chobanov believes the government is reacting under pressure, citing several recent measures: increases in social security contributions, higher taxes on dividends, and a growing administrative burden. Together, these factors triggered a stronger response from employers’ organizations than in previous budget cycles.

Looking ahead, the economist described the fiscal outlook as particularly challenging. He noted that even if the new measures were fully implemented, it remains unclear how the budget could function effectively. The core problem lies in the expenditure side, where adjustments and efficiencies should be sought, rather than focusing primarily on boosting revenue through taxation.

Chobanov highlighted inefficiencies in the capital program, suggesting that cuts there are not entirely negative. He emphasized the need to review both current and capital expenses and suggested that additional fiscal buffers could be found elsewhere in the budget. The economist also called for more realistic planning of revenues, noting that collections have generally been proceeding well.

Source: BNR interview