IMF Mission in Bulgaria Ends

The International Monetary Fund's mission in Bulgaria ends.

The International Monetary Fund has advised tightening next year’s budget spending by at least 1%, primarily through curbing wage growth in the public sector. It also recommended abolishing the maximum social security threshold and the cap on pensions in order to encourage higher contributions.

In addition, the IMF supports raising social security contributions as early as next year and called for a broader pension reform, with particular emphasis on strengthening the second and third pillars — mandatory and voluntary supplementary pension schemes.

Once expenditure has been stabilised and efficiency improved, Bulgaria should also consider moving from a flat tax to a progressive taxation system, the Fund suggested.

Speaking to BNT, Prime Minister Rosen Zhelyazkov stated that, for the time being, the government is not considering changes to tax rates or a freeze on incomes.