In the studio of “Face to Face“ economist Petar Ganev, senior researcher at the Institute for Market Economics, commented on the impact of the war in the Middle East on the global and Bulgarian economy.
“When there is uncertainty, when the prices of raw materials rise, in the case of fuels, this leads to fears of a slowdown in growth, a risk of recession“, commented Ganev. He noted that US growth is already slower – about 2 points per year, while the Bulgarian economy grows by about 3.
The effect of the war on the markets is direct, according to him: “There are calculations that show that if oil reaches levels of 160-170 dollars, this is equivalent to going into recession. It is speculative, but such calculations exist.“
Regarding the political dimension of the conflict, Ganev commented that the strategic goal could be control over the strait, through which 20% of the world's oil passes, in view of the influence on China: “Maybe it is one of the many reasons.“
He emphasized that the effects on inflation and growth are manifested in a prolonged period of high prices: “The question is how long it will last. And the question is whether Trump can manage this process or whether things no longer depend only on your decisions.“
As for Bulgaria, Ganev specified: “The effects are real. To some extent, the fear of what could happen prevails, how high this price could go and the cost to business. This is more of a fear of future development, rather than the current state.“
On the topic of state measures, he added: “In my opinion, it is a good opportunity where there are regulatory obstacles, for the state to ease business and ease the pressure on prices. This may temporarily concern the toll system, fees for digital food vouchers or other administrative obstacles.“
Ganev also commented on the effect on the pockets of Bulgarians: “There is undoubtedly an effect. It is most visible in transport, where fuel is the largest share, in food the effect is smaller, because there is a long chain from producer to consumer. A 20% increase in fuel prices does not mean a 20% increase in food prices.“