The Fiscal Council of Bulgaria has raised alarms about the rapid growth of personnel costs in the state budget over the past two years, warning that this trend poses a serious challenge for budget 2026. According to the council’s analysis, public sector payrolls have risen sharply, both in total expenditure and relative to GDP, and several sectors now carry disproportionate burdens. The council recommends concrete measures to optimize costs, including merging municipalities to reduce administrative overhead, rationalizing the number of police officers, and requiring civil servants and police personnel to contribute to their own social insurance, aligning them with private sector standards.
Municipal administration faces particular pressure as the population declines. Despite fewer residents, the number of municipal employees has grown to 35,000, and the administrative burden per citizen has increased significantly. Similarly, the police force has expanded, with Bulgaria now reporting 421 officers per 100,000 people, well above the EU average of 312. Spending on internal order and security accounts for 2.7% of GDP, compared with the EU average of 1.7%. The Fiscal Council highlights that such growth in personnel costs not only strains the budget but also fuels inflation by pushing private sector wages upward and creating perceptions of inequality across public services.
In 2024, personnel costs totaled over 20 billion leva, exceeding initial projections by 2.2 billion leva. The education, healthcare, and state administration sectors dominate payroll expenditures, accounting for roughly 72% of total wages. Healthcare staffing increased from 101,000 in 2019 to 132,000 in 2024, with wages rising from 1.7 billion leva to 3.4 billion leva. Public sector salaries average 2,400 leva, outpacing the private sector average of 2,300 leva and creating labor market pressure. (Novinite)