Bulgarian MPs approve debt ceiling increase to shore up Budget revenues
Bulgaria’s National Assembly approved at second reading on June 18 a bill to raise the government debt ceiling by 3.8 billion euro, allowing the Cabinet to draw short-term debt to shore up Budget revenues.
Any new debt has to be issued before Parliament passes the 2026 Budget package and has to be repaid by the end of the year, according to the amendments to the law extending the duration of the provisions of the 2025 Budget Act, adopted by the MPs on June 18.
The bill passed with 136 MPs in favour, with support coming from Prime Minister Roumen Radev’s Progressive Bulgaria and the opposition Movement for Rights and Freedoms, 44 opposed and 17 abstaining.
Bulgaria’s National Assembly is yet to pass a Budget package for 2026, after the bills tabled by the Rossen Zhelyazkov government last year triggered large-scale protests that led to that Cabinet’s resignation in December.
Bulgaria’s law on public finances allows, in the absence of a Budget approved by Parliament, to extend the provisions of the previous year’s Budget. The National Assembly has done so in December, for an initial three months, and again in March, until a 2026 Budget package is approved.
Under this framework, central and local governments can continue to spend within the limits set in 2025 Budget, but not higher than the revenue collected in 2026.
Bulgaria recorded a consolidated Budget deficit of 1.76 billion euro in the first four months of the year, or 1.4 per cent of this year’s estimated gross domestic product.
Earlier this month, the European Commission said it would recommend an excessive deficit procedure against the country, projecting a 4.1 per cent deficit in 2026.
Finance Minister Gulub Donev was more gloomy in his assessment, saying that the deficit could reach 7.4 per cent of GDP “without changing current policies, without taking measures to consolidate state spending,” a figure that the opposition criticised as alarmist.
(Bulgaria’s National Assembly. Photo: parliament.bg)
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