Bulgaria approves 2026 budget with wider deficit as government targets economic growth

Friday 24 July 2026 - 11:15

By: Sahili Aya

Bulgaria approves 2026 budget with wider deficit as government targets economic growth

Bulgaria's parliament has approved the country's long-awaited 2026 budget, setting out plans for a larger fiscal deficit as the government seeks to support economic growth following months of political uncertainty.

The budget projects the deficit to reach 5.7% of gross domestic product (GDP) in 2026, compared with 3.5% in 2025, while the economy is expected to expand by 2.6% during the year.

New budget ends period of uncertainty

The approval brings an end to Bulgaria's temporary budget arrangements, which had been in place after a previous proposal triggered public opposition and political tensions.

The earlier draft included increases in social security contributions and dividend taxes, measures that sparked protests late last year and contributed to the collapse of the previous political setup. The unrest eventually led to early elections and the formation of a new government under Prime Minister Rumen Radev in May.

Government balances spending and growth goals

The 2026 financial plan reflects the government's effort to combine fiscal management with measures aimed at supporting economic activity.

A higher deficit target provides additional room for public spending, but it also highlights the challenge of maintaining fiscal stability while addressing social and economic priorities.

Focus turns to implementation

With the budget now approved, attention will shift to how effectively the government implements its spending plans and manages public finances throughout the year.

Bulgaria's economic performance will be closely monitored as the country continues to navigate domestic political changes and broader challenges affecting European economies.