Institute for Market Economics Proposes Hard Spending Cap and 30 Percent Debt Limit for 2027 Budget
Economists at the Institute for Market Economics released an alternative fiscal package aimed at eliminating persistent budget deficits through structural spending cuts, administrative downsizing, and state asset privatisations, dnevnik.bg reported.
The proposal introduces a rigid expenditure ceiling alongside a statutory public debt limit capped at 30 percent of gross domestic product. To achieve a budget deficit below 3 percent without relying on tax hikes or increased social security contributions, the independent policy group targets state-owned enterprises for sale and urges sweeping reductions in central government personnel.
Targeting State Enterprises and Bureaucracy for Privatisation
The IME framework identifies several major state entities for complete or partial privatisation to generate revenue and curb ongoing subsidies. The targeted corporations include the Bulgarian Energy Holding, the Bulgarian Development Bank, and the state postal carrier Bulgarian Posts.
Alongside asset sales, the plan calls for expanding concession agreements for strategic infrastructure assets. These structural adjustments aim to remove loss-making operations from the public ledger while streamlining administrative expenditures across ministries and executive agencies.
Institute for market economics proposes strict debt limits
Why does the Institute for Market Economics recommend a 30 percent debt limit?
The proposed 30 percent cap on public debt establishes a strict fiscal anchor to prevent the national debt-to-GDP ratio from expanding during economic downturns and ensures long-term macroeconomic stability.
Which specific state-owned enterprises are marked for privatisation under the plan?
The alternative budget targets Bulgarian Energy Holding, the Bulgarian Development Bank, and Bulgarian Posts for structural sale or private concession arrangements.
How does the proposal plan to handle budget deficits without raising taxes?
Instead of increasing income taxes or social security rates, the institute relies on aggressive spending cuts, administrative layoffs, and revenues generated from state asset privatisations to bring the deficit below the 3 percent threshold.
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