Bulgaria: Fiscal Risks from State-Owned Enterprises

State-owned enterprises’ (SOEs) economic and financial performance may have important fiscal implications. This study evaluates related fiscal risks in Bulgaria from both aggregate and firm-level perspectives. The low level of state-guaranteed debt of SOEs poses minimal fiscal risk. However, contingent liabilities could be a fiscal concern in the long term due to the low profitability of major SOEs and their inefficient resource allocation. Given their crucial role in the production network, their inefficiencies likely negatively impact the overall economy’s productivity and competitiveness. Additionally, liquidity and solvency risks are evident in several key SOEs. These findings underscore the need for monitoring and improving SOEs’ financial performance.