Minority government in the pipeline
With a solid majority of 102 votes in favor, the BSP's National Council approved the party's participation in a GERB-led government, joining the emerging coalition of GERB, BSP, and TISP(There is such a people). The coalition gained traction after the faction aligned with Ahmed Dogan announced it had received a final agreement for parliamentary majority negotiations, with decisions pending from its collective bodies.
Previously, the Dogan faction was only offered parliamentary support without official involvement, which they opposed. The latest agreement includes their participation in a Joint Governance Council and potential second-tier government positions, with GERB proposing a minority government led by Rosen Zhelyazkov. The coalition would command 126 votes with Dogan's backing, but the absence of a "sanitary cordon" against Peevski's group remains a contentious issue.
Strong winds guide BSE to growth
The past year has been favorable for investors on the Bulgarian Stock Exchange (BSE). After a 27% surge in 2023, the benchmark index SOFIX rose an additional 17% in 2024, reaching 895 points in late December-the highest level since 2008. While the 2007 record of 1962 points remains out of reach, activity on the exchange is thriving, with trades up by 14% and turnover by 24% year-over-year.
Market development was further highlighted by the April launch of EuroBridge, a dual-listing segment with Frankfurt. Companies like Shelly, already listed in Germany, joined the platform, and others signaled interest. New listings also bolstered the exchange, with industrial firm Bulmetal raising over 8 million levs on the main segment and several others, including Boleron and Paysera Bulgaria, securing 5.5 million levs through the SME-focused beam market.
Budget woes run deep
The year began without an approved budget, with the caretaker cabinet's proposed fiscal plan revealing alarming signs of Bulgaria's mounting fiscal challenges, exacerbated by years of political instability and populist spending. The first government securities auction for 2025, scheduled for January 20, will test market confidence, offering 300 million levs in three-year bonds at 2.75% annual interest. The results will indicate investor sentiment amid political and economic uncertainty.
While the European Central Bank's recent rate cuts could improve financing conditions, Bulgaria's unresolved political crisis-now over two months without a regular government-casts doubt on stability and reform capacity. Investors may tread cautiously as the proposed budget highlights funding gaps driven by unsustainable increases in salaries, pensions, and tax reliefs. However, progress toward meeting eurozone inflation criteria and the prospect of adopting the euro by 2026 may provide a glimmer of optimism for the country's economic outlook.
Minority government in the pipeline
With a solid majority of 102 votes in favor, the BSP's National Council approved the party's participation in a GERB-led government, joining the emerging coalition of GERB, BSP, and TISP(There is such a people). The coalition gained traction after the faction aligned with Ahmed Dogan announced it had received a final agreement for parliamentary majority negotiations, with decisions pending from its collective bodies.