Bulgaria is heading towards a debt abyss. This is what economist Kuzman Iliev predicted. According to him, the debt is already accumulating at an alarming rate. And in the background of this, there was no reformist resource where someone could say that it should be stopped.
Iliev explained that by the end of the year, our country should take out a new debt of BGN 8 billion. This will happen from external and internal markets, but the interest rates and conditions will not be favorable. If Bulgaria fails to do so, then we will have liquidity problems, because the state will not have cash with which to carry out its functions at the time when it is needed.
Iliev believes that the budget will be implemented as it was set. But there is an unprecedented deficit in it, and everything will be spent to the last penny. Thus, according to him, the important question arises as to what the next rulers who will come to power will do. Will they too continue to slide down this slide that leads to the abyss.
Iliev also commented that in the last 20 years there has been the feeling that we have learned the lessons from the bankruptcies that have befallen Bulgaria and that we should act wisely financially. But now it appears that this is not the case.
The expert emphasized that of the BGN 11.3 billion in question, which is being talked about, 5 billion would go to social payments, BGN 4 billion would be for pensions, as well as for increasing wages in the public sector. However, at the same time, it is pensions that are paid through taxes, and thus the model is turned upside down. And on top of that, there is an unsustainable and politically driven spending spree that means the accumulation of even more debt.
Thus, according to him, the country will find itself in a situation where it will have to wonder how to melt the deficits and whether it will be done by raising taxes, which is the most likely, but also the most damaging scenario. The other option is to take new and new loans, but this is also sweeping the problem under the carpet. Costs can also be restructured and reduced, but according to Iliev, no one will do that.
