site.btaFiscal Council Recommends that Bulgaria Lower GDP Share of Public Spending

The Fiscal Council recommends that Bulgaria lower the level of public spending as a share of GDP, because in times of crises, high shares of public spending hamper economic growth. This transpired during a presentation by the Fiscal Council on the 2025 State Budget Bill within a meeting of the parliamentary Sub-committee for Control of Public Expenditure here on Tuesday.

During the meeting, Fiscal Council member Lyubomir Datsov outlined two main recommendations regarding Bulgaria's fiscal planning, which include containing public spending and changing the budgeting approach. "We recommend that Bulgaria hold the level of public spending relative to GDP for one main reason - the level of spending does not affect the macroeconomic equations, but it does affect something else, especially in an environment of alternating crises, as there have never been four crises within ten years," Datsov said.

The Fiscal Council's second main recommendation is to consider more explicit measures to change the way budgeting is done, such as programme budgeting or outcome-based budgeting. This would reduce the pressure of public investment on the budget, Datsov explained.

"The policy on pensions and social benefits needs to be changed, but it needs very serious political courage," said Fiscal Council member Grigoriy Vazov.