Bulgaria's 2015 Draft Budget Includes Minimum Wage Freeze

Business » FINANCE | November 26, 2014, Wednesday // 12:47| Views: | Comments: 0
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Bulgaria: Bulgaria's 2015 Draft Budget Includes Minimum Wage Freeze A folder with an inscription "State Budget". Photo by BGNES

Keeping the minimum wage at its 2014 levels and slashing money for salaries in the administration by 10 percent are among the core points of next year's draft budget published on the Finance Ministry's website.

The latter move is related to a process of "optimization" that state structures are expected to undergo in 2014.

A decision to freeze the minimum wage comes despite calls from trade unions and Social Minister Ivaylo Kalfin to increase it by BGN 40 compared to this year.

Currently at BGN 340, the minimum wage is however projected to grow by BGN 20 in 2016 and BGN 20 more in 2017.

The budget also includes a budget deficit of three percent to GDP (down from this year's expected 3.7%) that is to gradually shrink to 2% in 2017. Income is estimated at 36.8% of the economy and expenditure at 39.8% for next year.

Fresh borrowing of BGN 8.1 B is expected in 2015. Bulgaria's debt would thus reach a total value of BGN 24.5 B, or 29.7% of the economic output.

Pensions go up over the next three years, with 1.9% from July 1, 2015 and 2.4%/2.8% the same day in 2016 and 2017 respectively.

GDP growth is projected at 0.8 percent, with domestic demand expected to boost growth rate to 1.5 percent in 2016 and 2.3 percent in 2017.

The maximum insurable earnings will be BGN 2600 in 2015, BGN 200 more than in 2014, but will remain frozen in the two years after, the draft also reads.

No changes to social and health insurance has been envisaged, but the minimum insurance thresholds corresponding to different occupations will see an average increase of four percent.

The flat tax system is to remain in force. Under a recent amendment, bank deposit interests are to be imposed a two-percent levy.

Technically, lawmakers have not yet moved to overhaul even this year's budget, but a final vote is expected later on Wednesday.

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Tags: minimum wage, budget, Ivaylo Kalfin, deficit, debt, deposits, insurance
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