Bulgaria: Selected Issues

IMF Staff Country Reports, June 13, 2024

Source details

Focus: the Bulgarian pension system.
Content: provides an overview of the pension system and describes measures taken in the last decade to increase its financial sustainability.
Emphasis: highlights how the measures taken during and after the Coronavirus disease 2019 (COVID-19) pandemic structurally affect the financial sustainability of the pension system.
Additional focus: shows that the recent measures compound the long-term pressure related to an aging population and details policies that could contain the projected increase in pension spending.

During the COVID-19 pandemic, the Bulgarian authorities increased pensions substantially to support pensioners’ living standards and aggregate demand.
These pension increases have become permanent and improved the adequacy of pensions.
The permanent pension increases, not matched by revenue measures, have widened the deficit of the pension system.
The recent measures compound long-term pressure from an aging population on pension finances.

The widened pension system deficit stems from increased permanent pension outlays without corresponding revenue measures.
Long-term pressures remain due to demographic aging, implying projected increases in pension spending unless contained by policy.

Reforms that increase the incentives to contribute to the pension system and thus revenue would improve the financial sustainability of the pension system and reduce fiscal risks.
The paper details policies that could contain the projected increase in pension spending (specific policies are described in the full paper).

Bulgaria: Selected Issues; IMF Country Report No. 24/164; May 10, 2024
- Bulgaria: Selected Issues; IMF Country Report No. 24/164; May 10, 2024 (Markdown version)
- Bulgaria: Selected Issues; IMF Country Report No. 24/164; May 10, 2024 (PDF)