Pensions in Bulgaria are to increase by 10 per cent from October 1 2007.

The increase resulted from the budget surplus, the Cabinet said after a meeting on July 29 2007.

Budget 2008’s macro-economic framework was confirmed, Focus news agency said. According to the framework, incomes should rise by six per cent while inflation will be 3.7 per cent.

The flat tax rate will be 10 per cent in 2008, Focus said.

No risk of financial instability was foreseen before the end of 2007, the Cabinet said.

Finance Minister Plamen Oresharski said that insurance instalments would drop by three per cent. This was because employers were declaring inaccurate insurance statements to avoid tax.