The Bulgarian government has presented its draft state budget for 2027, which provides for an increase in the minimum wage, higher pensions, expanded social support for families, and additional investment in science, education and defence. At the same time, the government aims to reduce the budget deficit and gradually stabilise public finances while maintaining the conditions necessary for further economic development.

 

On 6 November 2026, Bulgarian Prime Minister Rumen Radev and Deputy Prime Minister and Minister of Finance Galab Donev presented the main parameters of the draft state budget for 2027. The presentation took place at the University of National and World Economy in Sofia, with representatives of the government, parliament, employers' organisations, trade unions and the expert community in attendance.

The proposed budget reflects the authorities' intention to balance the state's social commitments with the need for fiscal consolidation. One of the government's key objectives is to gradually reduce the budget deficit, improve the efficiency of public spending and establish a more sustainable financial foundation for long-term economic growth.

According to the draft, the budget deficit in 2027 is projected to reach 3.5% of GDP, or approximately EUR 4.9 billion. New government borrowing is expected to amount to EUR 8.6 billion. The government plans to gradually reduce the deficit to 3.1% of GDP in 2028 and 2.4% in 2029. Thus, the proposed budget policy is intended not only to address current social and economic challenges but also to strengthen the country's long-term fiscal sustainability.

Increasing household incomes is one of the key priorities of the draft budget. The monthly minimum wage is expected to rise to EUR 660 in 2027, compared with the current EUR 620. Salaries for public-sector employees are set to increase by 5%, while teachers' salaries are expected to rise by 7.5%. At the same time, the government plans to optimise public administration expenditure, including reducing personnel costs in a number of state institutions.

Particular attention is also being given to pensioners and families with children. From 1 July 2027, pensions are expected to be adjusted under the so-called Swiss formula, with an estimated increase of approximately 8%. The maximum monthly pension is planned to rise to EUR 1,874. An additional EUR 72.5 million is earmarked for family support. The monthly childcare allowance for parents during the second year of parental leave is expected to increase to EUR 450. The government is also proposing to expand tax relief for parents according to the number of children in their families.

The social component of the budget also includes additional assistance for vulnerable groups. A total of EUR 132.6 million is allocated for heating assistance. In addition, the government plans to increase funding for scholarships, student accommodation and university canteens. Separate allocations are intended to support salary increases for young doctors undergoing specialist training, which should help strengthen the human resources capacity of Bulgaria's healthcare system.

The development of science, education and advanced technologies is emerging as one of the strategic priorities of the budget policy. According to Prime Minister Rumen Radev, funding for scientific research is expected to increase by almost 100%, with an additional EUR 62 million allocated. Among the initiatives outlined are the establishment of the country's first artificial intelligence gigafactory, the development of digital infrastructure, cooperation with the European Space Agency and participation in NATO technology initiatives. These priorities are important for expanding Bulgaria's innovation capacity, training highly qualified specialists and enhancing the competitiveness of the national economy.

Defence funding is another important area of the proposed budget. According to the presented parameters, defence expenditure is expected to exceed EUR 3 billion. Against the backdrop of continued instability in the Black Sea region, Russia's war against Ukraine and changes in the European security architecture, strengthening defence capabilities is particularly important for Bulgaria as a member of NATO and the European Union. The development of military infrastructure, the modernisation of the armed forces and enhanced preparedness for emerging threats remain essential components of national security.

The economic projections underpinning the budget envisage GDP growth of 2.5% in 2027, with inflation expected to reach approximately 4%. The government also expects the share of public expenditure in GDP to decline from 43.5% in 2026 to 39.6% in 2027. This is expected to be accompanied by the optimisation of administrative structures and improvements in the efficiency of public spending.

At the same time, implementing the proposed budget will require addressing several complex challenges. New government borrowing, the need to contain the deficit, the maintenance of social commitments and increased defence spending will require a careful balance between economic growth and fiscal discipline. Particular attention will also need to be paid to the business environment, investment activity and the preservation of household purchasing power.

The draft budget also envisages changes to tax and administrative policies, including measures to increase tax revenues, optimise public expenditure and revise certain tax exemptions. These provisions may become subjects of discussion between the government, employers and trade unions during the subsequent consultation and approval process.

 

The next stage will involve consideration of the draft budget by the National Council for Tripartite Cooperation, followed by the procedures stipulated by law. The final budget parameters will depend on the outcome of consultations and parliamentary deliberations.

#NEWS

#BULGARIA

07.11.2026 09:52