Bulg

Bulgaria's financial landscape shows a consolidated budget deficit of 3.35 billion leva in the first six months of 2025, which is 1.5% of the estimated gross domestic product for the year. This deficit is a significant increase from the 2024 figure of 0.63 billion leva, although the 2024 figure was partly offset by funds carried over from the previous year's budget. 1. **Significant Budget Deficit**: The budget deficit for the first half of 2025 is notably higher than the previous year, indicating a potential challenge for the Bulgarian government in managing its fiscal responsibilities. 2. **Revenue Increase**: Consolidated revenue in the first six months of 2025 was 39.02 billion leva, a 13.1% increase year-on-year, primarily driven by a 17.1% rise in tax revenues to 31.87 billion leva. This increase suggests improvements in economic activity, although it may not fully offset the higher expenditure. 3. **Debt Financing**: Bulgaria has recently taken on new state debt amounting to 4 billion leva. This borrowing, along with the issuance of €4 billion in bonds, indicates a proactive approach to financing budgetary needs and capital projects. 4. **Economic Indicators**: Retail sales in Bulgaria have shown acceleration, with a 6.8% year-on-year growth in June 2025. This suggests strengthening consumer spending, which could be a positive indicator for economic confidence and potential fiscal revenue. 5. **Infrastructure and Investment**: The partnership between Bulgaria's Ministry of Energy and Citi for financing the construction of new units at the Kozloduy Nuclear Power Plant highlights ongoing investments in critical infrastructure. This is also complemented by the expansion of renewable energy projects, such as Helleniq Energy's acquisitions in Bulgaria, indicating a diversified approach to economic development. In conclusion, while Bulgaria faces a substantial budget deficit, the country is actively managing its finances through debt issuance and strategic partnerships. The increase in tax revenues and retail sales suggests underlying economic strength, although the government must continue to monitor its fiscal policies to ensure long-term sustainability.