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Bulgaria aims to reduce 2027 deficit as EU pressure mounts 

By Reuters News

SOFIA, Nov 6 (Reuters) - Bulgaria aims to narrow its fiscal deficit to 4.2% of economic output next year from about 5%, as the European Union increases pressure on the euro zone's newest member to reduce spending.

The EU opened a disciplinary action against Bulgaria in July for running a ​budget deficit beyond the 3% target ceiling set under EU ‌rules, forcing the country to seek further savings ahead of the publication of its budget on Friday.

In a letter to the European Commission dated November 2, Bulgaria said it would aim for a deficit of about 5% of gross domestic product this year, which it will aim to reduce to 4.2% in 2027 and 3.5% in 2028. It said that it expects to get within EU limits in 2029. The official 2027 figure is set to be published on Friday.

Sofia had previously forecast a fiscal deficit of 5.7% of GDP for 2026.

Bulgaria, which adopted the euro in January, is among the poorest EU states and has struggled with corruption. It published its first euro-based budget in the middle of the year after snap elections which led to a new government taking office in May.

Despite its high deficit, Bulgaria's public debt stood at 28.7% of GDP at the end of the second quarter, the fourth-lowest level in the EU, according to Eurostat data.

The European Commission raised concerns over what it said was a projected 10% rise in spending, compared with its recommendation for a rise of up to 4.2%.

Sofia has cited increased spending, including for speeding up the uptake of EU funds and structural imbalances carried over from previous years, for the excessive deficit. It has said there was limited time to implement additional measures this year.

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