In brief
The government presented a 2027 draft that projects a 3.5% GDP deficit easing to 2.4% by 2029, while aiming to keep minimum wage, pensions and unemployment benefits stable. Employers largely welcomed the plan, trade unions were split, and the Supreme Court of Cassation raised concerns over cuts to judicial staff. These developments unfold against the backdrop of EU fiscal oversight.
In Sofia on 12 November 2026, Finance Minister Galab Donev addressed employers and trade unions at an emergency meeting to present the 2027 public finance draft, which he described as a “budget of responsibility” that pursues fiscal sustainability without abandoning income support or investment priorities. The plan projects a cash‑basis deficit of 3.5 % of GDP in 2027 that will decline to 3.1 % in 2028 and 2.4 % in 2029, while total government debt is expected to reach 31.4 % of GDP, mirroring the current Excess Deficit Procedure imposed by the EU.
Donev said the budget includes measures to improve revenue collection, prevent tax and social‑security contribution evasion, and reduce administrative costs for businesses and citizens. “Fiscal consolidation requires efforts from all of us, which is why dialogue with you is of key importance,” he told the assembled social partners. The Minister noted that the 2027‑2029 medium‑term framework takes EU recommendations into account, allowing corrective measures to be implemented this year.
The draft also outlines a 35.6 % to 36.1 % share of revenue, grants and donations to GDP between 2027 and 2029. Consolidated fiscal‑programme expenditure is projected to fall from 43.5 % of GDP in 2026 to 39.6 % in 2027, then to 38.9 % in 2028 and 38 % in 2029. Minimum wage is set at approximately EUR 660 in 2027, while a new borrowing limit of up to EUR 8.6 bn is built into the plan.
For the public social‑insurance system, the National Social Security Institute Governor Vesela Karaivanova highlighted pension rises of 7 % to 8 % under the “Swiss rule” and higher thresholds for minimum and maximum unemployment benefits. The reforms are expected to lift social‑security contribution revenue by an additional EUR 989 mn in 2027, with the employer‑to‑employee contribution ratio unchanged. The monthly childcare allowance for parents of children under two will rise from EUR 398.81 to EUR 450, with a 75 % payment for mothers returning to work before the second year, up from 50 %.
Union and Employer Positions
Trade unions and employers broadly endorsed the draft, though divisions emerged. The Confederation of Independent Trade Unions in Bulgaria (CITUB) offered conditional approval, praising increases in pension and unemployment benefits while noting the need for adjustments in the social‑security income thresholds. “The proposal contains several positive measures, including higher minimum and maximum social‑security income thresholds and adequate funding for statutory expenditures,” CITUB representative Asya Goneva said.
Citub’s stance was summarized by the following statement from its leadership: “We welcome the planned increase in the maximum pension and the higher minimum and maximum unemployment benefits.”
In contrast, the Podkrepa Confederation of Labour opposed the draft, arguing that the proposed social security increases were insufficient to offset the fiscal consolidation measures. The Bulgarian Industrial Capital Association (BICA), however, welcomed the draft in principle, supporting measures that preserve core tax rates, raise the VAT registration threshold, and reduce administrative burdens for businesses.
Employers expressed support for the broader fiscal plan but raised concerns over higher social‑security contribution ratios and the proposed 33 % excess‑profits tax. The Bulgarian Industrial Association (BIA) called for the removal of the tax, citing its potential to undermine investment predictability. The Bulgarian Chamber of Commerce and Industry (BCCI) similarly opposed the tax, describing it as inconsistent with market principles. Both organisations called for greater transparency about the projected savings and borrowing.
The Fiscal Council reacted sharply, warning that the planned deficit reduction relies heavily on one‑off revenue measures. It estimated that the projected EUR 1.926 bn from the excess‑profits tax would actually yield only about EUR 211 mn and that the deficit could stay between 3.4 % and 4.4 % of GDP through 2029 if the risks materialised. The Council urged permanent spending cuts of roughly 1 % of GDP and a fiscal buffer of at least 0.5 % of GDP below the net expenditure ceiling each year.
In separate opposition, the Supreme Court of Cassation argued that budget measures affecting the judiciary would undermine financial autonomy and reduce staffing capacity. It objected to cutting clothing allowances for court staff and to proposed social‑security adjustments that could demotivate judges and court employees. “These measures would undermine the financial autonomy of the judiciary as a whole and reduce the administrative staffing capacity of the courts,” the Court’s statement said, a stance supported by 159 members of the court’s staff.
The meeting underscored the delicate balance the Bulgarian government must strike: achieving fiscal consolidation to satisfy EU oversight while maintaining social protection for citizens, especially pensioners, and safeguarding judicial function. The draft policy signals a tentative path forward, but the fragmented responses from unions, employers, foreign investors and legal experts indicate that the road to a sustainable fiscal trajectory remains contested and uncertain.
