03.06.2021

In the European Semester Spring Package, the European Commission ranks Bulgaria among the three countries (together with Sweden and Denmark) that meet the deficit criterion set by the Stability and Growth Pact and our country will not be subject to an excessive deficit procedure. According to the forecast of the European Commission, Bulgaria’s deficit will be 3.2% of GDP in 2021 and 1.9% of GDP in 2022.

As regards general government debt, it has increased in all Member States. In 14 Member States, the debt ratio has exceeded the 60% of GDP reference value under the Stability and Growth Pact. With its general government debt of 24.5% of GDP for 2021, Bulgaria is among the Member States with the lowest values in the European Union; in terms of this indicator, our country ranks the second after Estonia (21.3%).

In the framework of the 2021 macroeconomic imbalances procedure, the European Commission has identified twelve Member States with macroeconomic imbalances. The economies of these countries will be subject to an in-depth review by the European Commission. For the second consecutive year, Bulgaria is classified as a country experiencing no imbalances.

The proposed country-specific recommendations are Bulgaria to:

1. In 2022, pursue a supportive fiscal stance, including the impulse provided by the Recovery and Resilience Facility, and preserve national investment. Keep the growth of nationally financed current expenditure under control.
2. When economic conditions allow, pursue a fiscal policy aimed at achieving prudent medium-term fiscal positions and ensuring fiscal sustainability in the medium term. At the same time, enhance investment to boost growth potential.
3. Pay particular attention to the composition of public finances, both on the revenue and expenditure sides of the budget, and to the quality of budgetary measures, to ensure a sustainable and inclusive recovery. Prioritise sustainable and growth-enhancing investment, notably supporting the green and digital transition. Give priority to fiscal structural reforms that will help provide financing for public policy priorities and contribute to the long-term sustainability of public finances, including by strengthening the coverage, adequacy, and sustainability of health and social protection systems for all.