Bulgaria’s 2027 Budget Plan: Modest Cuts, Higher Insurance Revenue

The Bulgarian government has submitted a budget plan to the European Commission, which outlines a modest reduction in expenses for 2027, but expects increased revenue from insurance contributions. The plan aims to reduce the deficit in the “State Governance” sector to 4.3% of GDP in 2027, which is slightly higher than the 3.9% forecast in the medium-term budget framework for 2026.

The government also expects an improvement in the budget balance for 2026, with a deficit of around 5% of GDP, compared to the previously forecast 5.4%. This is due to changes in the Ministry of Defense’s calculations, including a revision of the delivery schedule for military equipment.

The budget plan focuses on increasing revenue, rather than reducing expenses. The main measures to increase revenue include a one-time tax on excess profits, an increase in the maximum insurable income, and an increase in the minimum insurance thresholds. The expected effect of these measures is an increase in revenue of €1.959 billion, or 1.39% of GDP.

The one-time tax on excess profits is expected to generate €800 million, or 0.57% of GDP, in 2027. The maximum insurable income will be increased to €2,400 from January 1, 2027, resulting in an additional €265.1 million in revenue. The minimum insurance thresholds will also be increased, generating an additional €196.7 million in revenue.

Budget Plan Details

The budget plan also includes measures to optimize expenses, such as a reform of the TELK system, a reduction in personnel expenses in the budget sector by 10%, and an optimization of personnel in the security forces. However, the expected effect of these measures is relatively small, with a reduction in expenses of €57.3 million, or 0.04% of GDP.

The government expects the combination of increased revenue and reduced expenses to result in an improvement in the fiscal balance of €2.015 billion in 2027.

Significant funds are planned for the development of defense capabilities in 2027, including the delivery of F-16 Block 70 aircraft, ground handling equipment, armament, and training.