Inflation during the summer months will most likely remain high. We may even see an increase above these 7% and reach 8-8.5%.
This was stated by economic analyst Preslav Raykov to the Bulgarian National Radio.
"Inflation is 7%. This is inflation that we expected due to the conflict in Iran, due to a number of other circumstances and due to the trade effect of joining the eurozone, which mainly manifested itself through the trade network. This is mainly inflation brought by the conflict in Iran, which is still traveling to the country, because at the moment there is no prospect of the conflict being ended in the coming days or months, and even if it is ended, we will need at least 3 to 6 months to have some normalization and, accordingly, a way back for energy raw materials, and a number of key raw materials, fertilizers, the food industry, the transport transition of goods to this region", he commented in an interview for the program "Predi visi".
According to him, the government does not have any moves and really working instruments with which it can limit inflation. And it should not limit it, Raykov added and explained:
"We have seen in recent years – the fact that we are in such a budget situation was the chimera that we have in our hands instruments that can limit inflation. Prices are not limited – fortunately, they are not limited, because any intervention in the price policy of the market leads to structural imbalances, leads to years after which these interventions only manifest themselves. At the moment, we are witnessing some interventions made in the last 5 years, which are already negatively affecting our budget, our ability to react to such an external shock now adequately, because the buffers have been exhausted in our economy. The buffers in the Bulgarian economy were quite".
The economist pointed out that today Bulgaria will probably be declared in an excessive deficit procedure. According to him, this procedure will be quite sobering. In his words, there is nothing so scary, and it is even partly useful:
"This is a controlling external mechanism. I am very glad that it exists, because otherwise perhaps the outrages that are happening in the management of our finances would be much greater and far more striking and cause more damage. /…/ Certainly, expenses will have to be reduced. Certainly, a very clear vision of what will not be done in the next 6 months will have to be given with someone who will stand behind it".
This procedure is not interested in political moves, whether the public is satisfied or not, it is interested in real data and measures, he pointed out and expressed his opinion: "The situation is not very pleasant, but it is not very tragic".
"Financial engineering in budgeting, i.e. the presentation of slightly more modeled data – such as we needed, of artificially lowering data in certain sectors, inflation figures – this thing is over. It is not infinite. "We cannot endlessly model things without taking care of what brings fresh resources into this budget, namely Bulgarian business, industry, trade, the people who produce and contribute to this budget," Preslav Raykov was categorical.