Bulgaria's state budget needs to work for more balanced growth, the Economic and Social Council (ESC) said after a plenary session. The document is titled "European Semester 2026: challenges and priorities for Bulgaria." At the same meeting, the council also approved a study on the social and economic impact of youth policies.

The advisory body says the budget should rest on spending the country can keep up over the long run, give investment and exports a bigger role, and back production with higher added value.

The ESC says it is seriously worried about the worsening state of the budget. The council agrees a fiscal fix is needed in time, but stresses that how the consolidation plan is built matters most. Bulgaria has until 2029 to correct its excessive deficit. This should happen through lasting structural changes and by checking whether spending actually works, the council says, not by cutting investment that has proven it drives growth.

Improving the budget balance should not hold back growth by cutting capital spending, money for education and research, or health prevention, the council says.

"Positive growth, high employment and low unemployment give us a good base, but they don't remove the barriers to catching up," the opinion says. Among those barriers, the ESC lists low productivity, weak private investment and innovation, a shrinking population, a lack of skills and wide gaps between regions.

"The right balance between raising revenue and cutting spending should be set based on how each move affects the economy, society and who gains or loses," the council adds.

The ESC insists the specific recommendations for Bulgaria must be reflected in the medium-term fiscal-structural plan, in budget planning, in structural reforms and in next year's progress report. The council recommends a small number of priority steps whose results can be measured and tracked through the monitoring and reporting systems already in place.

The study on young people looks at how youth policy is run and paid for, what employment schemes for young people actually achieve, and how to draw more of them in. The main problem, the council says, is that data isn't collected in a systematic way and results aren't tracked. More than 100,000 young people in Bulgaria are neither working nor studying nor training, and youth centres, organisations and youth workers could be put to fuller use to reach vulnerable groups, the ESC says.

On Tuesday the council is hosting a forum on making social support more effective. It's part of a task the Council of Ministers set for a public debate on the risks of codifying social support legislation and its effect on whether social payments are adequate.