site.btaBulgaria’s Public Debt per Household to Exceed BGN 30,000 in 2026, Economists Forecast

Bulgaria’s public debt, allocated per household, stands at an average of BGN 21,905 as of the end of 2025. Projections indicate that this figure will increase by around 50% in 2026, surpassing BGN 30,000, economists Stoyan Panchev and Max Baklayan said at the BTA National Press Club in Sofia on Monday. They presented a new digital tool for analyzing and visualising public debt.

The debt calculator, called Value Keeper, available at https://app.valuekeeper.bg/, shows in real time both the nominal size of Bulgaria’s public debt and its ratio to the country’s gross domestic product (GDP). According to the application, public debt currently amounts to BGN 62.7 billion, or 28.43% of GDP.

The economists warned that the rapid increase in public debt carries a risk of a higher tax burden in Bulgaria.

According to Panchev, Bulgaria’s public debt has been growing at a rate of BGN 83 per second by the end of 2025. Based on the tool’s calculations, to repay the public debt each Bulgarian household would currently need to pay BGN 21,905. This amount is expected to rise by about 50% in 2026 if the Ministry of Finance’s projections for taking on new debt materialize. Max Baklayan explained that as a result, public debt per household would increase to an average of BGN 31,383, while the pace of debt accumulation would jump sevenfold to EUR 280 per second.

Baklayan stressed that this debt is ultimately repaid by all citizens through taxes and social security contributions, and that rising public debt implies an increase in the tax burden – something the International Monetary Fund has already recommended to Bulgaria’s authorities.

“The International Monetary Fund has on several occasions recommended that our government review the flat tax, meaning a gradual increase in tax rates. Social security contributions have already risen by 2%, and the maximum insurable income, as we know, will continue to increase each year, including again in 2026. In other words, we are in a process of raising taxes on the population in order to service this debt, because there are only two ways to repay debt – taxes and inflation,” Baklayan said.

He also pointed out that as a result of joining the eurozone, Bulgaria will move from a currency board system, under which the money supply is legally backed, to a fiat monetary system. According to him, this will increase the country’s access to borrowing, potentially accelerating the pace of indebtedness.

Stoyan Panchev added that precisely because of this change in how the monetary system operates, many countries that have joined the eurozone have seen an increase in public debt. He argued that Bulgaria must maintain a low level of indebtedness to avoid raising taxes and to improve the competitiveness of its economy.

“It is crucial for the health of an economy, especially a small, open one like Bulgaria’s, to maintain low levels of debt. First, so that the economy can produce rather than repay money that has already been spent, and second, to keep the tax burden relatively low. It is no coincidence that the budget brought down by the protests included proposed increases in pension contributions and dividend taxes. This is because over the past three years we have accumulated significant hidden deficits in the budget,” Panchev said.

“These hidden deficits have to be financed, and logically the authorities start raising taxes. Unfortunately, this is an expected move given the widening of these deficits. If we want lower taxes and a more competitive economy, we need to focus attention on the debt burden and open a discussion on how it will evolve after eurozone accession,” he added.

The economists argued that public debt in itself is not necessarily a negative thing if it is invested in boosting the economy’s competitiveness. However, they stressed that after joining the eurozone Bulgaria will need to maintain strict fiscal discipline to avoid a rapid increase in indebtedness.