The National Council for Tripartite Cooperation (NCTC) met yesterday on Budget 2024. During the meeting, income policies were also discussed – the increase of the minimum wage by 19.6% from BGN 780 to BGN 933 from 2024, the increase of pensions updated according to the Swiss rule by an average of about 11%.
After the Tripartite Council, however, the trade unions announced that they would firmly not support the proposed draft budget of social security because of the envisaged freezing of the minimum and maximum daily amount of unemployment benefits. They insisted on an increase. However, the business community was pleased that no increase in the childcare allowance was envisaged for the second year and that it would remain at BGN 780.
On this topic, we spoke with economist Rumen Galabinov. He told Iskra.bg:
„The budget for 2024 is in the process of remodeling and revision. On several considerations – political, economic and financial – which were presented at this Tripartite meeting. Prior to that, at the meetings of the political parties from which support is sought in the National Assembly, the measures to refine the revenue part of the budget were marked accordingly, from the point of view of how far it is possible to realize the increased collection that is planned for various state income. For example, on the gas transit fee, whether it should remain in force or not. In the end, in the revenue part of the budget, more than BGN 2 billion is planned for next year.“
„On the other hand, ending the derogation earlier, as it was planned for October 2024, must not have an impact and there is no reason to believe that there will be a sharp increase in fuel prices in Bulgaria. Despite the war in Ukraine and conflicts in the Middle East, the international oil market remains relatively stable, i.e. we don’t have any dramatic price hikes. If in time we rely on the processing of non-Russian oil, then at least in the short term there will be no risks for fuel prices,“, the economist pointed out.
According to Galabinov, there are still controversial issues related to the tax changes affecting the Value Added Tax (VAT). The question is whether to equalize VAT for all at 20%, which includes those who had their VAT reduced to 9% during COVID-19.
The economist also commented that there is also a discussion in the part about the new loans for next year. He pointed out the main questions:
– What should be the annual limit for 2024?
– Should it be in BGN or Euro?
– Will this limit be sufficient to cover the government debts taken in previous years and the other part to cover the budget deficit, planned to be 3%?
On the agenda is the question of whether we will receive and invest BGN 1 billion and BGN 400 million under the National Recovery and Sustainability Plan (NRSP) from Brussels. Galabinov predicted that we can expect these funds in 2024.
