Bulgarian Parliament approves draft 2025 Budget package at first reading
Bulgaria’s National Assembly passed the 2025 Budget Act at first reading in the early hours of March 6, with 152 MPs in favour and 73 opposed.
Over the course of an 18-hour sitting that started on March 5 and ended just short of 3am on March 6, the MPs also passed at first reading the separate social security and healthcare funds’ budget bills.
The lengthy sitting was the result of delaying tactics by the opposition during debates on two unrelated bills earlier in the day, which were rejected by the House, but took hours of MPs’ time.
The Budget was backed by the groups in the government coalition – GERB-UDF, Bulgarian Socialist Party – United Left, populist ITN and Ahmed Dogan’s loyalists in the Democracy, Rights and Freedoms.
Delyan Peevski’s splinter Movement for Rights and Freedoms – New Beginning also voted in favour, with the opposition We Continue the Change – Democratic Bulgaria, pro-Russian Vuzrazhdane and populist-nationalist Mech voting against.
Normally Bulgaria’s Parliament approves a Budget before the start of that year, but no bill was tabled in the previous legislature by the Dimitar Glavchev caretaker government.
The current 51st National Assembly extended the provisions of the 2024 Budget Act until the end of March shortly before the current government of Prime Minister Rossen Zhelyazkov took office in January.
The Budget package envisions a consolidated fiscal programme with revenues of 90.3 billion leva and 96.7 billion leva in spending, with the Budget deficit estimated at 6.4 billion leva in real terms, or three per cent of gross domestic product (GDP).
On the spending side, the bulk of the increase – from 81.5 billion leva planned for 2024, although only 78.1 billion leva are projected to have been actually spent – was due to a rise in social transfers, mainly hikes in amounts earmarked for pensions and household assistance.
The commensurate increase in revenue (in 2024, the Budget envisioned 75.3 billion leva to be collected, but current projections put the figure at 72 billion leva) was forecast to come from increased tax collection and reducing tax fraud.
However, that projected revenue increase has been criticised by the opposition as inflated and the outcome of the projected amount needed to keep the deficit no higher than three per cent, rather than a realistic target.
The 2025 Budget macroeconomic framework sets an economic growth target of 2.8 per cent, slightly more conservative than the European Commission’s 2.9 per cent projection made in last year’s autumn forecast.
The draft budget sets the debt ceiling at 61.7 billion leva, with the government allowed to issue 18.9 billion leva in new debt this year. The ministry said that at an estimated 28.4 per cent of GDP, that was still one of the lowest figures for government debt in the European Union.
In its medium-term projection, the Cabinet also forecast government debt rising steadily to an estimated 87.8 billion leva in 2028 (or 35.6 per cent of GDP), prompting additional criticism from opposition parties that new debt would be used to fuel rising Budget spending.
(Bulgarian National Assembly photo: parliament.bg)
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