The political instability in Bulgaria after the populist ITN party quit the coalition government over disagreements on budget spending and whether to back North Macedonia's European Union accession has raised concerns. However, the Balkan nation's prime minister has pledged to lead a minority government on Wednesday.

Kiril Petkov said he was "optimistic" his centrist PP party and its two remaining coalition partners could still deliver on pledges to uproot widespread corruption in the European Union's poorest member state after losing their parliamentary majority.

But analysts say the rift is likely to bring fresh instability just as the Ukraine war causes inflation to surge. Petkov's government only took office in December after a prolonged political crisis.

"A minority government will be much better than a government whose arms are being twisted for additional money and genuine reforms are being stopped," Petkov told a news conference.

Without ITN, the government has 109 of 240 votes in parliament, short of the 121 needed to pass legislation.

Petkov said the leftist Socialists and pro-reform Democratic Bulgaria had reconfirmed their support and he hoped that some ITN lawmakers would also back the government.

Relations had been tense since an attempt to appoint a senior ITN member as central bank chief failed.

On Wednesday, after the government approved a revision of the 2022 budget bill disregarding ITN's demands for more funds for construction companies, ITN leader Trifonov said he would quit the coalition and "end this agony."

Entertainer-turned-politician Trifonov has accused Petkov of disregarding Bulgaria's interests by pushing to lift its veto on North Macedonia's EU accession talks, which Bulgaria has long blocked, under pressure from EU and NATO allies.

Petkov said ITN had blocked government efforts to crack down on corruption.

Analysts said a vote on the budget or on the appointment of new ministers, whichever comes first, would be a survival test for Petkov's government. Democratic Bulgaria appealed to ITN to reconsider and avoid throwing the country into "chaos."