This year's draft budget is highly disappointing. Instead of interrupting the practice of continuously inflating expenses, this process is accelerating. With each subsequent year, expenses are growing – We haven't had such a growth of 6.1% since 1997. This was stated in the morning block of NOVA by the former deputy governor of the BNB Kalin Hristov, quoted by novini.bg.
He added that not even minimal efforts are being made to optimize expenses, but instead very high revenues are being written off. According to him, the estimated results for revenue growth of over 33% from VAT in an environment with low inflation and relatively low economic growth are greatly overestimated, which even creates a risk of having a larger deficit at the end of the year.
In the medium term, the budget will require an increase in taxes and a drastic reduction in expenses. This year, the opportunity to start the consolidation process will clearly be missed, commented Hristov.
In the budgetary context of all this, the former deputy governor of the central bank is skeptical that the convergence report on the euro will be positive.
Every criterion for membership in the eurozone must be fulfilled on a sustainable basis. Since 2018, we have never fulfilled the inflation criterion. It will be very difficult for us to receive an assessment that the inflation criterion is fulfilled on a sustainable basis. In addition, we also have a budget that is also clearly not sustainable, concluded Kalin Hristov.