The Ministry of Finance published the draft government budget of Bulgaria for 2018 and updated mid-term budget forecast for the period 2018-2020

The budget deficit is projected at 1.0% and 0.5% in 2018 and 2019 respectively, where revenues are declining from 36.2% of GDP in 2018 to 35.5% of GDP in 2020 and expenditures are shrinking from 37.2% of GDP in 2018 to 35.5 of GDP in 2020. On the revenue side, no taxation change is planned. Yet, the social insurance contribution to the state social insurance fund is to be raised by 1% as from the next year. The pension policy foresees the required contributory service for a pension entitlement to increase by 2 months each year until reaching 35 years and 10 months for women and 38 years and 10 months for men in 2020. In order to achieve the minimum levels of excise duty rates in the EU and according to the agreed transition period, the excise tax on cigarettes is expected to reach the minimum excise duty of BGN 177 per 1 000 pieces as of 01.01.2018. The top 2018 budget spending priorities are planned to be Education, Defence and Healthcare as well as the presidency of the EU Council in the first half of 2018. The updated mid-term budget forecast (2018-2020) includes an increase in the minimum wage from BGN 460 currently to BGN 510 as of January 2018, BGN 560 as of January 2019 and BGN 610 starting January 2020. A number of other social payments are to be updated, yet public expenses are planned to decline to 35.5% of GDP in 2020 from 37.2% of GDP in 2018. The draft 2018 budget limits new domestic government debt issues to BGN 1 bn. Over the three-year period debt-to-GDP ratio is expected to decline, and in the end of 2020, the debt is to be BGN 23.8 bn., or 20.0% of the expected GDP, thus indicating the country's improved budget position.