Fiscal Council warns of a record-high deficit

Bulgaria’s budget deficit has risen sharply over the past three months, raising concerns about fiscal stability, the Fiscal Council said in an analysis of first-quarter data.

Without corrective measures, there is a risk of a sustained deterioration in public finances and deviation from budget targets, the council warned.

The accumulated deficit reached 1.5 billion euros (1.63 billion USD), or 1.2% of GDP, in March — the highest level recorded in 15 years. According to the council, this increase cannot be attributed solely to seasonal or technical factors.

Spending growth was mainly driven by higher social and health insurance payments, including pensions, as well as increased personnel costs and capital expenditure.

The rise in personnel costs and pensions reflects indexations that took effect in March. The analysis also highlighted a significant increase in capital spending linked to final payments for investments under Bulgaria’s National Recovery and Resilience Plan.

Editor: Ivo Ivanov

Edited and posted in English by E. Radkova