Bulgaria's minfin eyes 3%/GDP budget gap in 2024-26

The budget deficit in 2023 is expected to amount to 5.8 billion levs ($3.16 billion/2.96 billion euro), or 3.0% of the forecast GDP for this year, the finance ministry said in its medium-term budget forecast published on Friday.

The projected budget deficit for 2023 is estimated with the assumption that Bulgaria faces a substantial risk of not receiving the second tranche of the National Recovery and Resilience Plan within the fiscal year, the request for which was tabled with delay before the European Commission on October 7, the ministry noted.

In 2022, Bulgaria posted a budget gap of some 4.86 billion levs, or the equivalent to 2.9% of GDP, the statistical office said last month, citing definitive data.

Budget revenue is expected to be equivalent to 37.7% of GDP, or 77.6 billion levs in 2024, moving up to 38.1% of GDP, or 82.97 billion levs in 2025, and declining to 37.9% of GDP, or 87.8 billion levs in 2026.

Expenditures are forecast at 40.7% of GDP in 2024, or 83.8 billion levs, increasing to 41.1% of GDP in 2024, or 89.4 billion levs, and slightly dipping to 40.9% of GDP in 2025, or 94.7 billion levs.

In 2023, budget revenue is estimated to come in at 67.2 billion levs, equivalent to 35.1% of GDP, while expenditures are seen at just over 73 billion levs, or 38.2% of GDP.

During the 2024-2026 period, there will be a steady trend of increasing debt. The finance ministry expects 57.2 billion levs of government debt by the end of 2025 at a debt-to-GDP ratio of 26.3%, rising to 28.8% of GDP, or 66.5 billion levs, by the end of 2026. The ratio of government debt to GDP is forecast to be below 49 billion levs, or 23.8% of GDP, at end-2024.

The estimates for GDP growth and average inflation in the 2024-2026 period remained unchanged from the recently published macroeconomic forecast.

(1 euro = 1.95583 levs)