Deficit spending

China will raise its deficit in order to boost spending next year, its finance minister said, according to state media, as Beijing looks to prop up its struggling economy.

The world's second-largest economy has for years battled sluggish domestic consumption, a persistent crisis in the property sector, and soaring government debt.

The Bulgarian National Bank (BNB) has expressed strong opposition to the draft state budget for 2025, which is set to be officially submitted to the National Assembly by the caretaker government. The central bank's position highlights several concerns regarding the proposed budget's parameters and its potential negative impact on Bulgaria's fiscal stability and long-term economic prospects.

Preliminary data from Bulgaria's Ministry of Finance indicates a slight reduction in the budget deficit for November compared to October. By the end of November, the deficit is expected to stand at 3.7 billion leva, marking a decrease from nearly 4 billion leva reported in October.

Following recent upgrades from rating agencies and the achievement of fiscal stability, Greece plans to tap international markets in 2025, seeking to raise 11 billion euros.

The Greek state's presence in the bond markets next year is expected to be more intense compared to this year, due to the increased financing needs of the state budget.

The decline in inflation is expected to continue in the coming period, Vice President Cevdet Yılmaz has said, noting that annual inflation has fallen by 27 points in the past four months.

"In mid-2025 or in the fall, we won't be talking about inflation anymore," Yılmaz said in a speech at a gathering with businesspeople in the province of Denizli.

Türkiye is "open for business and dialogue," Turkish Treasury and Finance Minister Mehmet Şimşek announced on Wednesday, emphasizing the nation's benefits from post-pandemic supply chain diversification and its comprehensive reform program to boost competitiveness, productivity, and potential growth.

The budget deficit is expected to fall below 5 percent of the gross domestic product (GDP) at the end of 2024, Vice President Cevdet Yılmaz has said.

In the medium-term program, the government predicted that the central government budget would be 2.65 trillion Turkish Liras or 6.4 percent of the estimated GDP.

Bulgaria is currently experiencing a significant budget deficit, according to the latest data from Eurostat. In the first quarter of 2024, the country's seasonally adjusted budget deficit as a percentage of GDP was -5.6%. This places Bulgaria among the highest in the European Union for budget deficits relative to GDP, on par with France.

The European Commission anticipates that Bulgaria will narrowly approach meeting the inflation criterion required for entry into the Eurozone, although it may not fully satisfy it.

Expected post-election fiscal tightening would strengthen the effectiveness of Türkiye's monetary policy, in the context of weakened transmission channels, Fitch Ratings has said. 

"If sustained, this improvement in policy consistency should support lower inflation, a narrower current account deficit and a recovery in international reserves," the rating agency added.