Budget 2025: Minister Petkova on the deficit, revenues, and POUW

FROM THE EDITORS: Finance Minister Temenuzhka Petkova commented on the budget's execution on the television show "The Day Begins". Her statements, supported by specific figures, paint a picture of a complex financial situation, influenced by past legislative decisions and current management challenges.

Bulgaria's Budget: Between Ambitious Goals and a Legacy from the Past

Sofia – Today, in accordance with the requirements of the Public Finance Act, the Ministry of Finance announced the final data on the execution of the state budget as of the end of July 2025. The published data, presented and commented on in detail by Finance Minister Temenuzhka Petkova on the television show "The Day Begins", reveal a dynamic picture of revenues and expenditures, as well as the challenges to the country's financial stability.

According to the information, revenues, grants, and donations under the consolidated fiscal program reached an impressive 46.3 billion leva. This represents a significant increase of 5.5 billion leva compared to the same period of the previous year. A key driver of this growth is tax revenues, which increased by 5.4 billion leva, or nearly 16.7% compared to 2024. This positive trend, which is at the heart of the government's fiscal ambition, is, however, viewed in light of an even more substantial increase in expenditures.

Rising Expenditures and Accumulated Deficits

Against the backdrop of increased revenues, expenditures also show a significant increase, reaching 50.4 billion leva – an increase of 17.7%. The Finance Minister pointed out that this growth is a direct result of changes in legislation adopted in previous years. Among the most significant payments are over 400 million leva directed to the Ministry of Regional Development and the Road Infrastructure Agency (API), as well as over 276 million leva paid to the Ministry of Transport.

As a result of the imbalance between revenues and expenditures, a deficit of 4.2 billion leva was reported as of July 31, which is equivalent to 1.96% of the country's projected Gross Domestic Product (GDP). Petkova emphasized that despite the ambitious revenue targets set in Budget 2025, they are directly conditioned by the "overly ambitious" expenditures accumulated over the last four years of political inaction and lack of political responsibility.

Challenges in Revenue Administration

Minister Petkova also highlighted the performance of VAT revenues, which showed a 22% increase. However, she admitted that there is a delay in the collection of this tax by the Customs Agency. According to her, this is partly explained by the fact that the 2025 budget was adopted late and the measures to improve collection, developed jointly with the NRA, came into force only from May 1. Nevertheless, she assured that these measures are already yielding visible results, with VAT revenues being 1.6 billion leva more than in the same period last year.

Despite the progress, the overall picture of fiscal policy remains under pressure. The minister categorically rejected claims of "accounting practices to hide the deficit" raised by political opponents.

Recovery and Resilience Plan and the Role of BDB

One of the main topics raised by the minister was the absorption of funds under the Recovery and Resilience Plan (RRP). She expressed hope and assured that "immense efforts" are being made to fulfill all commitments that would secure the second and especially the third payment by the end of the year. These payments are of "key importance" for meeting the set revenue targets. In this context, she issued a strong warning to those who "are trying to sabotage the government's actions", stating that they bear "serious responsibility if Bulgaria reaches a point where it cannot absorb and receive the third payment under the RRP".

Petkova also addressed the Bulgarian Development Bank (BDB). She clarified that the bank is commercial, but its activity is regulated by a special law that obliges it to finance public investments of key importance for the economy. The minister expressed hope that "all bad practices" associated with the BDB are a thing of the past, and a guarantee of this is transparent management. She categorically refuted the claim that the 5 million leva limit for lending to legal entities has been removed.

Finally, Temenuzhka Petkova confirmed that the sustainability of public finances and compliance with debt and deficit criteria are a key priority for the government. She once again emphasized the strategic importance of Bulgaria's membership in the Eurozone, defining it as "very serious advantages" for the country.