Minimum Wage in Bulgaria to Reach 650 BGN in 2021, Government to Be Smaller

The Bulgarian state's budget is expected to be without a deficit in 2020 for the first time. The basic taxing policies will remain the same and wages are expected to have a steady growth of about 40-50BGN until 2021. This was all reported in the Mid-Term Budget Forecast for the period 2019-2021, released by the Ministry of Finance earlier today.

This document gets released on a yearly basis and is a short-term forecast made by the government for the economic future of the country as well as a reflection on the economy - it sets expectations and goals. The government is counting on a steady growth of both income and spending. The rate of this growth, however, is expected to be lower than that of the country's GDP, meaning that the government's redistributive role will also decrease. The country's debt will also shrink - not so much in nominal value, but a lot in % of the GDP - from 23.9% in 2017 to 18.2% in 2021. 

This is all based on the Ministry of Finance's assumption that both the world and European economies will continue their rapid growth. The foreseen growth of Bulgaria's GDP for this year is 3.9%, however, the Ministry expects a slight decline throughout the next couple of years. The Ministry predicts that despite the decline, the economy is going to stay over it's expected growth-capacity - estimated at 3.5% of the GDP. 

As mentioned earlier, the minimum wage is expected to grow as well. The rate of 40-50BGN per year predicts a minimum wage of 650BGN, come 2021. Currently, the minimum wage is 510BGN and is expected to reach 560BGN on January 1st, 2019, then 610BGN in 2020 and one final increase of 40BGN in 2021 (resulting in a minimum wage of 650BGN). However, with the wages, the insurance income will also grow. Meaning that self-insured citizens will pay more insurance. 

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Vasil Manev

Vasil Manev is a student in Computer Science and an aspiring columnist, studying in Heidelberg, Germany.

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