Bulgaria Withdraws 2025 Budget Proposal as Government Prepares for Tough Fiscal Decisions

Politics | January 23, 2025, Thursday // 12:10
Bulgaria: Bulgaria Withdraws 2025 Budget Proposal as Government Prepares for Tough Fiscal Decisions Temenuzhka Petkova

Finance Minister Temenuzhka Petkova has revealed that Bulgaria's deficit for the first quarter of 2025 is projected to reach 3.684 billion leva, signaling challenging financial circumstances for the country. Petkova emphasized that the government faces tough trials ahead in balancing the budget and meeting fiscal targets.

At a briefing following the first meeting of Prime Minister Rosen Zhelyazkov’s cabinet, Petkova explained that the government has decided to withdraw the draft State Budget Act for 2025, which was proposed by the caretaker government. This includes the withdrawal of laws concerning the National Health Insurance Fund and the National Social Security Institute. The decision reflects the establishment of a regular government with its own policies, which will be reflected in the 2025 budget. Additionally, the government plans to withdraw the tax laws.

The revised budget proposal is set to be presented to the Council of Ministers by February 14, with the approval process in the National Assembly to follow. Petkova acknowledged that the task of presenting a budget with a deficit under 3% of GDP, as required by the Public Finance Act and Bulgaria's commitments to the eurozone, would be a difficult one.

Currently, Bulgaria is operating under the extended Budget Act, which allows the country to function until the end of March within the framework of this law. According to the Ministry of Finance’s analysis, revenues for January amounted to 3.684 billion leva, while expenditures were 3.277 billion leva, resulting in a deficit of 407 million leva. The deficit is expected to grow in February to 1.735 billion leva, with a further 1.491 billion leva in March. By the end of the first quarter, the total deficit is projected to be 3.634 billion leva. Petkova attributed this deficit to the inefficient use of public funds over the past three years.

To ensure the functioning of the state until the adoption of the 2025 budget, discussions have taken place regarding the use of reserve funds to cover ongoing expenses. The amount of funds needed will be determined in the next cabinet meeting, should the proposal be approved.

Despite the challenges, Petkova remains committed to bringing Bulgaria's budget deficit down to 3% of GDP. She expressed concern about the country’s financial stability, acknowledging that “the time has come when we have to pay the bill.”

Petkova also noted that Bulgaria currently does not meet the eurozone criterion for price stability by a narrow margin of 0.1 percentage points. Once this criterion is met, Bulgaria will request the preparation of convergence reports, taking another step toward joining the eurozone.

Prime Minister Rosen Zhelyazkov, who took office on January 16, reaffirmed the government’s decision to withdraw the 2025 State Budget Act and related financial legislation. Zhelyazkov indicated that these decisions were based on the latest economic data, including Eurostat’s January report, which provides a clearer picture of the country’s fiscal situation. He also emphasized that the Zhelyazkov government is committed to implementing specific policies and financial estimates within the next month.

Source: Bulgarian National Television (BNT)

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Tags: Petkova, Bulgaria, budget, deficit

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