site.btaCentral Bank Opposes Strongly 2025 Draft Budget

In a statement on Wednesday, the Bulgarian National Bank (BNB) strongly opposes the proposed draft budget for 2025 and its adoption.

According to the bank, the parameters set in the expenditure part of the budget imply a significant increase in the redistributive role of the state in the economy in 2025, with planned total budget expenditures under the Consolidated Fiscal Program at an unprecedented rate of 46% of GDP, which has not been seen  after 1998.

Meanwhile budget expenditures for 2024 are also projected to reach an extremely high amount of 38.2% of GDP.

The absence of measures leading to sustainable fiscal consolidation, which would focus on containing the high growth of current budget expenditure, significantly increases the likelihood of an increase in the tax and social security contributions for businesses and households.

As a result, the proposed fiscal framework for 2025 represents a complete change in the economic policy pursued so far, based on maintaining low rates for corporate and income taxes, which support economic growth and have a positive impact on labour supply and demand, the BNB said.