Bulgaria Faces Over 2.8 Billion Leva Deficit at End of Q3
At the end of the third quarter, Bulgaria’s treasury faced a deficit exceeding 2.8 billion leva
According to Eurostat data, Bulgaria's tax-to-GDP ratio is among the lowest in the European Union. In 2023, the overall tax-to-GDP ratio for the EU, which includes the sum of taxes and net social contributions as a percentage of gross domestic product (GDP), was recorded at 40.0%. This figure represents a decrease from 40.7% in 2022.
Similarly, the tax-to-GDP ratio within the euro area also declined, dropping from 41.4% in 2022 to 40.6% in 2023. In absolute terms, revenues from taxes and social contributions across the EU rose by 308 billion euros compared to the previous year, totaling 6.883 trillion euros.
The variation in the tax-to-GDP ratio among EU member states is notable. The highest ratios were found in France (45.6%), Belgium (44.8%), and Denmark (44.1%). Conversely, Bulgaria's ratio stood at 29.9% in 2023, placing it alongside Ireland (22.7%), Romania (27.0%), and Malta (27.1%) as having some of the lowest tax shares in relation to GDP.
In the last year, 11 EU countries experienced an increase in their tax-to-GDP ratios, with the most significant rise noted in Cyprus, which jumped from 35.9% in 2022 to 38.8% in 2023. Luxembourg also saw a substantial increase, moving from 40.2% to 42.8%.
In contrast, 12 EU nations recorded a decrease of more than 0.1 percentage points in their ratios, with Greece experiencing the most significant drop from 42.8% in 2022 to 40.7% in 2023. France followed closely, decreasing from 47.6% to 45.6%. Bulgaria's tax-to-GDP ratio declined from 31.1% in 2022 to 29.9% in 2023, with only five other EU member states showing a greater reduction in this metric, including Greece, France, Germany, and Malta.
Stanislav Popdonchev, Deputy Chairman and Financial Director of the Bulgarian Chamber of Commerce, expressed concerns over Bulgaria's economic direction
Inflation is expected to rise moderately at the beginning of 2025, according to the Bulgarian National Bank (BNB)
Bulgaria could potentially adopt the euro on July 1, 2025, if all the necessary steps are taken within the required timeframe
According to recent Eurostat data, Bulgaria continues to hold the lowest average salary within the European Union.
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