In December 2025, the Bulgarian Government approved the revised Budget, in euro currency, for 2026. The budget estimates €50.4bn ($59.1bn) in revenue and €54.1bn ($63.3bn) in spending. It also projects a deficit of 3% of GDP or €3.7bn ($4.3bn) for 2026; this will be followed by a deficit of 2.8% of GDP in 2027 and 2.4% of GDP in 2028. Amid Bulgaria’s decision on the implementation of the euro starting 1 January 2026, the information and documents regarding the budget process for 2026 have been prepared in euros for the first time. The 2026 Budget has been developed in line with the approved initial National Medium-Term Fiscal and Structural Plan of the Republic of Bulgaria for 2025-2028, which outlines policies, priorities, reforms, and investment strategies for the medium-term future. Additionally, the government of Bulgaria has also approved the National Health Insurance Fund and the Social Security Fund. The government also forecasts the country’s GDP to grow by 2.7% in 2026, and 2.5%-2.4% in 2027-2028. Furthermore, the average annual inflation is projected to reach 3.5% in 2026, which will slow to 2.9% in 2027 and 2.5% in 2028.
Consolidated budget revenue is expected to increase to €50.4bn ($59.1bn) in 2026, from €44.5bn ($52.1bn) in 2025, before reaching €51.1bn ($59.9bn) in 2027 and €54.8bn ($64.1bn) in 2028. The government of Bulgaria also projected the government’s debt to rise from €37.6bn ($44.1bn) by the end of 2026, to €43.5bn ($51bn) in 2027 and €49bn ($57.4bn) in 2028. Furthermore, the government has also updated its medium-term budget forecast for 2026-2028, which includes the reasons for the draft law on the State Budget of the Republic of Bulgaria for 2026. Some of the major spending increases in the expenditure part of the budget includes an increase in funds of the municipalities from €4.6bn ($5.4bn) in 2025 to €5.1bn ($6bn) in 2026, an increase in the minimum wage from January 1st, 2026 from €550.7 ($645.3) to €620.2 ($726.7), and an increase in the amount of the benefit for raising a child to two years of age from €398.8 ($467.3) to €460.2 ($539.3) up to 2028. Furthermore, the funds for capital expenditures will amount to €7bn ($8.2bn) in 2026, including a national funding of €3.2bn ($3.7bn) and European funding of €3.9bn ($4.5bn).
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
In November 2025, the Ministry of Finance published the first draft Bill on the State Budget of the Republic of Bulgaria for 2026. However, the Bulgarian Government withdrew its 2026 budget draft on 2 December 2025, after widespread protests due to proposed tax hikes and spending in it, which led to economic uncertainty ahead of its euro adoption. In the previous draft 2026 budget, Bulgaria has also projected a deficit of 3% of GDP in 2026, 2027 and 2028. All the business and employer groups strongly opposed some revenue measures in the first draft budget, along with cost increases. The Bulgarian 2026 budget also overlaps with major political challenges, including frequent elections and the transition to the euro, leading to political and economic instability.
Also, Bulgaria has adopted the euro currency on 1 January 2026, replacing the lev after nearly 20 years in the EU, making it the 21st member state to be part of the eurozone. This transition to the euro is expected to lead to economic stability, smoother transactions and stronger integration across Europe, through building a stronger foundation for long-term growth and resilience. However, many Bulgarians consider that the currency transition could lead to higher prices and aggravate the political instability rattling the country. Moreover, Parliamentary elections are scheduled to be held in Bulgaria in 2026 following the resignation of the Zhelyazkov government on 11 December 2025, following weeks of nationwide protests regarding his government’s economic policies and corruption concerns. If held, it will be the country’s seventh snap election since 2021, because of the political instability affecting the country’s economy.
The budget also includes significant European Commission (EU) funds for infrastructure and energy efficiency projects, particularly in the form of increased municipal funding for public services. The Bulgarian Government has allocated €3.2bn ($3.7bn) in nationally funded projects under its 2026 Budget, with another €920m ($1.1bn) earmarked for the development of projects under the municipal investment program. Additionally, another €3.9bn ($4.5bn) will be financed through EU programs, including the Recovery and Resilience Plan, which will support renewable energy and other infrastructure projects. All the investments under the budget and EU are expected to ensure financial stability in the country’s economy and support the growth of the construction industry in the upcoming years.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
