Bulgaria’s state debt tops €10b with €4.6b in guarantees

Bulgarian National Bank Board member Lyubomir Karimanski cautioned on Monday that government borrowing exceeds official projections, with state-guaranteed obligations reaching 4.6 billion euros beyond acknowledged debt, surpassing 10 billion euros. Speaking during a Hello Bulgaria broadcast, he explained these guarantees cover loans and commitments to public enterprises, including Bulgarian Energy Holding, raising concerns about servicing capacity and interest rates that will surpass 1 billion euros in the coming year despite eurozone and Schengen membership plus improved credit ratings.

Karimanski criticized budget practices dating to 2023 that fund expanded public sector compensation through additional borrowing rather than productive investments, warning that rising debt without corresponding export growth or productivity gains worsens lending terms. He cited Kozloduy Nuclear Power Plant as an example where authorities collect 100 percent of dividends while the facility borrows from banks to finance studies for units seven and eight, resulting in unnecessary interest payments.