State Budget Foresees Increase in Pensions, As Well As Higher Revenues and Expenditures

In an extraordinary meeting on February 24, the Council of Ministers approved the State Budget, as well as the budgets of the National Health Insurance Fund and the National Social Security Institute. The budgets foresee an 8.6% increase in pensions, record-high revenue and expenditure levels of over 90 billion BGN.

The latest version of the state budget also includes an increase in state debt to 61.7 billion BGN.

The government approved the three budgets to ensure their swift adoption by the Parliament.

“The 2025 budget aims for balanced growth without increasing tax and social security burdens, income growth outpacing inflation, and capital expenditures tailored to the needs of citizens, municipalities, and the country’s capabilities,” said Prime Minister Rosen Zhelyazkov.

The Prime Minister said that he will seek support for the budget in the Parliament.

“We inherited challenges but did not blame anyone because we believe in the saying that If you keep looking back, you gon' trip going forward."

The main criticism from businesses and unions regarding this year’s budget concerns the planned VAT revenues, which are not guaranteed to be collected. In response, the Minister of Finance presented them as ambitious but explained that this is the only way to balance the budget.

“We have tried, within this month, to propose a State Budget Law that meets public requirements and aims to improve the quality of life of Bulgarian citizens,” said Finance Minister Temenuzhka Petkova.

“All social benefits will be preserved throughout the year, including pension increases under the Swiss rule, so despite the difficult situation, we managed to ensure that all citizens in Bulgaria can feel secure,” said Borislav Gutsanov, Minister of Labour and Social Policy.

The business sector commented that they support the efforts of the cabinet to control the deficit and budget spending, but nevertheless not all organisations accept the budgets.

“We believe it is unacceptable that the redistribution role of the budget is being increased, taking much more income from households and businesses, from the real sector and the economy, and funneled into unreformed systems,” Bulgarian Industrial Capital Association (BICA) said.

From the business perspective, while the tax and social security model is maintained for this and the next year, they criticised the budget for unclear policies.

“Clearly, we cannot expect significant reforms in this budget, given the four years of unrestrained spending in the Bulgarian parliament, especially regarding wages,” said Dobri Mitrev, Chairman of Bulgarian Indistrial Association.

Trade Unions accept the budgets conditionally, requesting more money for wages.

“A 5% increase in public sector wages doesn’t satisfy us. Our federation is discussing whether to protest or not, and most likely there will be protests if the budget remains unchanged,” said Atanas Katsarchev, of trade union Confederation of Labour "Podkrepa".

The differing positions of the unions and employers did not bother the government.

“I would personally be worried if employers and unions always had the same opinion; that would be suspicious. There are different perspectives on the presented budgets, but with a collegial attitude and, in my opinion, a shared view that this is the possible budget,” said Tomislav Donchev, Deputy Prime Minister.

The first consideration of the budget in the parliamentary committee will take place on Wednesday.