The task before the Ministry of Finance to draw up the 2025 Budget will be quite difficult, because the measures listed in this way, firstly, are insufficient, and secondly, some of them can be seen as unpopular and harmful to the economy. This is what the former Minister of Finance Vladislav Goranov said in the show "Metronome". on Radio "Focus".
In his words, the Ministry of Finance made a tactical error by announcing a revenue-expenditure gap of 18 billion, and that this was no problem as a budget of 3% would be proposed< /strong>. Here, according to him, the measures that could lead to this consolidation of nearly 12 billion should have been announced. "The moment the measures are put on the table, then we can see whether it is actually possible to avoid an excess deficit next year or not."
According to the former finance minister, the proposed increase in the insurance burden by 3% points, the increase in the minimum wage will lead to quite serious pressure on the labor market and, accordingly, to an increase in unemployment. Vladislav Goranov added, that, in his opinion, what could be done is for the Finance Ministry to waive those increases in expenditure, such as the remuneration of the police, the army, the higher schools, which have not yet come into force and have not yet produced an effect. According to him, it is good to remove a large part of the differentiated VAT rates, as it is probably not possible to do without an increase in VAT.
The perfect mess has formed in public finances as a combination of political instability and a rather serious discrepancy between income and expenditure, the expert also said. "This is what I would suggest: it is better to think of an increase in indirect taxes, if unavoidable, than to affect direct taxes, and through indirect taxation justice is partially restored. The trend of economic development in this and the following years is for minimal growth, and considering what is happening in the largest Western economic partners, for example Germany, we must be very careful not to put at risk this fragile growth that is outlines in the coming years", he explained and added that when taking on new debt, the rate of indebtedness is formidable and the risk of an increase in interest rates is quite serious. "Then we will already talk about a debt spiral."
There is a risk of delaying Bulgaria's acceptance into the Eurozone, but it is not so related to politicians, Vladislav Goranov also believes. "I am inclined to agree that in the coming months we will also cover the criterion of price stability, which will give us a window to request an excellent convergence report and to request the accession of the leva to the Eurozone. And while we were trying to deal with the price stability criterion, we missed the mark. If, as it is going, we fail to bring in a budget with 3% and miss the next 2-3 months to ask for an excellent convergence report, our chances of soon joining the eurozone are significantly limited, he added.