site.btaUPDATED Parliament Approves 2026 State Budget Bill аt First Reading

Parliament on Wednesday approved at first reading the 2026 State Budget Bill, by a 143-81 vote and no abstentions.

The draft budget was supported by Progressive Bulgaria and the Movement for Rights and Freedoms. Against were GERB–UDF, Democratic Bulgaria, Continue the Change, and Vazrazhdane.

During the debate, opposition parties criticized the projected budget deficit and the lack of structural reforms included in the draft budget. The ruling party said that this is a budget reflecting the country's inherited financial situation and that it presents the true state of public finances.

Deputy Prime Minister and Finance Minister Galab Donev described the 2026 draft budget as "bold, but not reckless."

Lawmakers also shortened the period for submitting amendments between the first and second readings of the bill to five days.

Explaining his vote against the budget, Venko Sabrutev of Continue the Change said he voted against the draft budget because, in his view, it hurts working people in Bulgaria. He argued that the budget proposes a higher social security contribution burden and freezes the entire social spending program.

Alexander Ivanov of GERB–UDF said that on the 68th day of Rumen Radev's government, a "budget of a progressive deficit" had been adopted. According to him, it offers no reforms, lower revenues, and higher spending than the budget proposed by Prime Minister Zhelyazkov's government at the end of 2025. Referring to the issue of political responsibility, Ivanov added that over the past five years, the current prime minister, who was president at the time, had governed through caretaker governments for more than two years and three months.

The draft State Budget provides for a general government deficit of 5.7% of GDP.

The draft budget projects total revenues, grants, and donations of EUR 49.6 billion, while total expenditures are estimated at EUR 56.8 billion.

Under the proposal, the maximum amount of new government debt that may be incurred in 2026 is EUR 10.1 billion. This amount includes a loan of up to EUR 3.261 billion under the European Security Action for Europe (SAFE) instrument to strengthen the defence industry.

Government debt is expected to reach EUR 37.7 billion, or 30.1% of GDP.

Total capital expenditure in 2026 is projected to amount to EUR 9.360 billion, including EUR 4.028 billion financed from national sources and EUR 5.331 billion financed through European funds, including the National Recovery and Resilience Plan.

From August 1, 2026, civil servants and employees under the Judicial System Act will be required to pay personal social security contributions.

From that date, social security contributions will be shared between the employer and the employee at a ratio of 80:20. Beginning January 1, 2027, the contribution split will change to 60:40, bringing it in line with the arrangement that applies to other employees.

The draft law provides for a 10% reduction in personnel expenses, effective September 1, with exceptions for municipalities, military personnel, employees covered by the Ministry of Interior Act, the State Agency for National Security Act, the National Protection Service Act, the State Intelligence Agency Act, the Execution of Punishments and Pre-Trial Detention Act, and personnel covered by Article 5 of the Medical Establishments Act.

The bill also proposes higher revenues from the toll road system, including a 30% increase in vignette (road-use) fees, effective August 1, 2026. It further provides for an increase in excise duty rates on tobacco and tobacco products from the same date.