With a 25% increase in global oil prices, moderate pressure on the Bulgarian budget is expected.

Main effects:

  • Increase in the budget deficit: Potentially up to 3.6% of GDP.
  • Increase in operational government expenditures: Energy consumption in public services, transport, and state administration.
  • Inflationary pressure: Adds approximately 0.4-1.0 percentage points to inflation.
  • Deterioration of the trade balance: The current account deficit may increase by about 0.2-0.4% of GDP.

Protective mechanisms:

  • Membership in the European Union.
  • Diversification of the energy sector.
  • Investments in infrastructure.

The Fiscal Council is investigating the potential effects of the sharp rise in oil prices, provoked by the military escalation in the Middle East.