What we see in the budget, unfortunately, is an expenditure section in which there is not even a hint of moving towards expenditure consolidation - to have tighter spending. This was stated to the Bulgarian National Radio by Lyubomir Karimanski, emphasizing that this is his expert opinion as a financier and economist.
"In the coming years, the growth and what is happening in the USA and Germany, and with the customs war that is starting between the USA, Europe and China is extremely worrying, and that is precisely why we should have had the first serious steps towards fiscal consolidation from the beginning of this year. This is not observed in the budget," he explained.
In the program "Nedelya 150" Karimanski, who is also a member of the BNB Board, noted that there is 24% more spending in the budget compared to last year (18.5 billion leva more). How can we expect fiscal consolidation and expenditure consolidation with this increase in spending, he asked and emphasized that this is unthinkable.
"It is unacceptable to have public spending that is outside the state budget in other regulatory acts of specialized laws. This destroys fiscal discipline in the country. /…/ At this point, it is extremely important, even imperative, for the Minister of Finance to have the rank of at least Deputy Prime Minister or even be Prime Minister. At this point, being able to make a budget that meets all needs and knowing at the same time that there will be a tightening of spending is an art.
According to him, the majority had the opportunity to change some of the laws or impose a moratorium on some of the laws that make spending in 2025. According to him, we do not have targeted budgeting of spending by necessity. "We are giving everyone a salary increase in certain ministries," the financier pointed out and added that there is no assessment of whether this is effective. In addition, according to him, state-owned enterprises cannot constantly be deprived of their dividends. For him, this is not a good practice.
Lyubomir Karimanski also commented on the state debt, as well as explained the state-guaranteed debt, which is another 5 billion. In total, it becomes 24 billion. in a year, he calculated and said:
"The growth of debt is such that we are starting to see the shadow of the debt spiral. This is already dangerous. This is a tone that is being set by Europe".
According to him, the rate of debt growth in Bulgaria is one of the highest in Europe.
"In the country, real investments that would bring added value to the public sector and increase its revenue have not been seen in the last few years. We have no added value in industries. Bulgaria's GDP is growing thanks to consumption, but not thanks to industry".
The expert outlined some geopolitical risks and geoeconomic conflicts. He also highlighted the weak growth of the economy, as well as the shortage of qualified labor. According to him, Europe is lagging significantly behind in the degree of digitalization and the implementation of innovations. According to him, the reason for this is the regulatory "congesting" framework, which needs to be eased.
Lyubomir Karimanski expressed the opinion that the eurozone will need transformation or change. If this happens for political reasons, this is very worrying, he believes.
"Bulgaria still has one of the most principled disciplines, systems, rules that work and they work towards having a disciplinary fiscal policy still".
According to him, politicians should explain to people what they are aiming for with the proposed budget. At the moment, there is no narrative about the budget, the financier noted. According to him, we do not see what has been done as a government program.
If between the first and second readings, the expenditure part of the budget is allowed to inflate, this will be negative for Bulgaria, he commented. If we are not able to make our story sufficiently motivated and justify what is stated as numbers and percentages, it will be difficult, Karimanski also predicts.