The Bulgarian Budget Estimate up to 2022: BGN 650 Minimum Wage and 4% Unemployment

The Ministry of Finance envisages 2019 to be the last with a budget deficit, and next year will plan the budget with a surplus of 0.4% of GDP for 2020, 0.2% of GDP for 2021 and 0.1% of GDP for 2022. This is included in the draft medium-term budgetary projection by 2022 published for public discussion.

The ministry's forecast is for GDP growth of 3.3% per annum in the next three years, 4.1% unemployment in 2020 and 4% over the next two, and declining annual average inflation from 2.5% to 2.1%.

In 2020-2022, employment growth is expected to slow down and gradually move to a 0.1% reduction in 2021 and 0.3% in 2022. The explanation is for the negative demographic trends that are reflected in a decline in the workforce. In addition, the free labor resource of unemployed and discouraged people (who want to work but do not believe they will find a job) has quickly exhausted.

The unemployment rate will continue to decline to around 4.0% in 2021-2022.

The Finance Ministry's projection is that inflation will decline due to the expected decline in international oil prices, the stabilization of prices for other commodities and the slower domestic demand growth. It is possible to have an increase in some of the prices of goods and services at administrative prices in the forecast period, warns the agency.

There is no change in taxes for citizens and business.

The forecast foresees an administrative increase of the minimum wage to BGN 610 from 1 January 2020 and to BGN 650 from 1 January 2021, as already reported, and in the year 2022 the amount of BGN 650 will be maintained.

The maximum insured income over the entire period is expected to be BGN 3,000. No changes are made to the period of payment of the cash benefit for...