International Monetary Fund officials have urged Bulgaria to abandon its flat tax system in favor of progressive rates for individuals and corporations, warning that current revenue generation cannot sustain quality public services. The Fund identified overheating risks despite strong economic expansion, with gross domestic product advancing 3.4 percent and unemployment at record lows.
IMF analysts flagged accelerating mortgage growth as a potential housing bubble threat, recommending central bank vigilance and active risk management tools. The institution praised pension contribution increases while calling for the elimination of social security income caps to address demographic pressures.
Bulgaria's economy should maintain roughly 3 percent expansion through the next two years, though inflation near 3.5 percent persists. Euro adoption will likely inject additional bank liquidity, potentially intensifying property market pressures while reducing transaction costs and bolstering investor confidence, according to the assessment.
IMF analysts flagged accelerating mortgage growth as a potential housing bubble threat, recommending central bank vigilance and active risk management tools. The institution praised pension contribution increases while calling for the elimination of social security income caps to address demographic pressures.
Bulgaria's economy should maintain roughly 3 percent expansion through the next two years, though inflation near 3.5 percent persists. Euro adoption will likely inject additional bank liquidity, potentially intensifying property market pressures while reducing transaction costs and bolstering investor confidence, according to the assessment.
