Bulgaria is on the verge of introducing the euro and preparing the state budget for 2026, while the prices of goods and services have continued to rise for months.
The International Monetary Fund (IMF) warned during its last mission to our country that public finances are "loose" and called for urgent measures to rein them in. Among the recommendations are the abolition of the flat tax and an increase in social security contributions.
Economist Lyubomir Karimanski, in an analysis in the bTV studio, emphasized that the main function of the state is stabilizing - through monetary and fiscal policy it must guarantee sustainability and fair redistribution of resources.
First, we need to see the expenditure side and what consolidation can be achieved in the fiscal position, and only then should we turn to revenues, noted Karimanski, quoted by news.bg. According to him, the government is acting short-sightedly when it allows populist decisions and creates "social mines" in the public sector, which creates tension and instability.
The expert pointed out that inflation in our country is mainly fueled by the rise in the price of food products and the growth in labor costs, which put pressure on the private sector. "When unit labor costs increase, enterprises are forced to pass them on to final prices," he explained.
Karimansky rejected the thesis that speculation is the main driver of inflation, noting that it is more characteristic of planned economies or wartime situations.
"Speculation can occur in wartime, where there is a planned economy. One of the main factors for increasing inflation is the increase in food prices, i.e. we have the opportunity to choose, but in parallel with the increase in food prices, we see how much these labor costs are increasing, which pressure the private sector to increase its labor costs per unit of production," said Karimanski.
He called for the future budget to be prepared on the basis of in-depth sectoral analyses, which, according to him, have been increasingly lacking in recent years.