site.btaHalf-Year Consolidated Fiscal Programme Deficit at EUR 2.4 Bln

Bulgaria has incurred a deficit of EUR 2,416.2 million (1.9% of projected GDP) under its Consolidated Fiscal Programme (CFP) as of June 30, 2026, the Finance Ministry reported on its website on Friday.

The Ministry's data on the implementation of the state budget in the first half of 2026 match preliminary estimates published in early July.

In June, the CFP deficit improved by around EUR 100 million from the May level of EUR 2.5 billion. The Finance Ministry attributed this to factors with a one-off annual effect on revenues, including higher corporate tax receipts in line with the deadlines for declaring and paying corporate taxes due under the Corporate Income Tax Act for 2025 on June 30, as well as a contribution paid into the state budget from the excess of the Bulgarian National Bank's revenues over expenditure for 2025.

The deficit at the end of June was around EUR 700 million higher than during the same period in 2025, when it amounted to EUR 1.7 billion, or 1.5% of GDP.

According to an analysis by the Fiscal Council published earlier this month, the government deficit as of June 2026 is the highest in 16 years. Under the 2026 State Budget Act for 2026, the deficit is expected to reach 5.7%.

The size of the fiscal reserve as of June 30, 2026, is EUR 6.881 billion, including EUR 5.365 billion in fiscal reserve deposits held with the Bulgarian National Bank and commercial banks, and EUR 1.516 billion in receivables from European Union funds for certified expenditure, advance payments and other items.

Revenues, grants and donations under the CFP amounted to EUR 21.573 billion by June 2026. Receipts increased by 8.1%, or EUR 1.621 billion, compared with the same period in 2025.

Tax and social security revenues rose nominally by 9.2%, or EUR 1.504 billion. Non-tax revenues were EUR 292 million lower, mainly due to lower dividend income from state-owned enterprises in 2026 following an advance dividend payment made in 2025. Revenue from grants and donations increased by EUR 409.2 million.

Tax revenues, including social security contributions, amounted to EUR 17.799 billion and accounted for 82.5% of total CFP revenues during the period.

Non-tax revenues stood at EUR 2.661 billion, a decrease of EUR 292 million, or 9.9%, compared with the same period in 2025. These revenues mainly consist of state, municipal and judicial fees, income from property, concession revenues, proceeds from the sale of greenhouse gas emission allowances and other sources.

Revenues from grants and donations, mainly payments under EU programmes and funds, amounted to EUR 1.113 billion.

CFP expenditure, including Bulgaria’s contribution to the EU budget, totalled EUR 23.990 billion by June 2026. By comparison, expenditure under the programme in June 2025 amounted to EUR 21.667 billion.

The Finance Ministry said the increase in expenditure was mainly driven by social and health insurance payments, including pension costs, as well as personnel costs, capital expenditure and other items.

The Ministry attributed the rise mainly to the base effect on pension expenditure following an 8.6% pension adjustment for inflation from July 1, 2025, the increase in the minimum wage from January 2026, an additional increase in remuneration payments from January 2026 reflecting accumulated inflation in 2025, and a significant rise in capital expenditure due to the implementation of investments and projects under the Municipal Investment Programme and the Recovery and Resilience Plan.

Non-interest expenditure amounted to EUR 22.913 billion, an increase of EUR 2.130 billion, or 10.2%, compared with June 2025.

Current non-interest expenditure totalled EUR 20.508 billion. Capital expenditure, including the net increase in the state reserve, amounted to EUR 2.388 billion. Current and capital transfers provided abroad totalled EUR 15.6 million. Interest payments amounted to EUR 516.7 million, an increase of EUR 153.1 million compared with the same period in 2025.

The debt of the Central Government subsector stood at EUR 34.314 billion at the end of June 2026, equivalent to 27.4% of GDP. This represents an increase of EUR 394.4 million compared with the end of May 2026, mainly due to funds drawn under two state loans from the Council of Europe Development Bank and the European Investment Bank, the Finance Ministry said.