The draft budget will likely need substantial revisions, while Bulgaria’s economic situation remains under pressure due to rising prices, high inflation and low economic growth. This was stated by economists Evgeniy Kanev and Arkadi Shарkov on the Nova TV programme “Hello, Bulgaria”.
“The budget will certainly be problematic,” commented Evgeniy Kanev. Arkadi Sharkov added that the deficit had been discussed since the beginning of the year and that he expected changes to the financial framework.
Inflation, prices and fuel
According to Sharkov, Bulgaria is facing high inflation compared with the other eurozone countries, combined with low economic growth. In his view, this is creating additional pressure on businesses, consumers and pensioners.
Kanev pointed to high fuel prices as another factor weighing on the economy. He did not specify what changes should be made to the budget, but described the financial framework as an impending problem.
Opportunity for investment in pharmaceutical production
Sharkov said that Bulgaria had an opportunity to attract investment in the production and supply of medicines. According to him, this would create more secure supply chains for the country and Europe and reduce dependence on deliveries from India and China.
The economist warned that the deepening of trade conflicts was making supply diversification increasingly important. In his words, investment in the pharmaceutical sector could be part of the response to this risk.
The budget as a political test
The political situation following the presidential election was also discussed in the conversation. Kanev described Andrey Gyurov’s result as very good, but pointed out that it was still unclear what he would do going forward.
Sharkov said that Iliana Iotova had received support not only from “Progressive Bulgaria”, but also from other political formations. According to Kanev, her attitude towards the upcoming budget would be an important test of the political commitments that had been made.
“It remains to be seen whether the newly elected president will fulfil his promises to be a unifier of the nation and work for peace,” Kanev said.