The introduction of a "fair price" on the market through the changes to the Consumer Protection Act will be overwhelming as an exercise and will most likely be quite useless as a guideline.
This was stated in an interview with News.bg by economist from the Institute for Market Economics (IME) Adrian Nikolov in connection with the measures proposed by "Progressive Bulgaria" to stop the growth of prices on the market.
Nikolov explained that the "fair price" as a measure laid down in the Consumer Protection Act, is the market price of a business, producer, trader and consumer who agree to carry out a transaction. "We are talking about a concept, rather than a written text, such as methodologies and by-laws on how to calculate the fair price", the economist pointed out.
According to him, calculating a "fair price" will take much more work than the measure itself actually acting on the market.
"The main criticism that comes from modern trade is that business will be burdened with administrative requirements, supply chains, production costs, and this is a quite justified concern. The government is laying down measures to combat prices, but it imposes additional administrative requirements on business. Otherwise, the measures are transparently aimed at large traders on the market," commented Adrian Nikolov.
He believes that there is no way to force small traders to provide accountability, which could be within the capacity of a large retail chain.
According to Nikolov, the Consumer Protection Commission has been provided with quite a few new rights since the Law on the Introduction of the Euro.
According to him, on the other hand, the CPC has new instruments with an expansion of the idea of a monopoly position.
"We are adding a new concept, which assumes that it is possible for several companies to have a monopoly position, without the need to prove a cartel. The field of competition law is expanding slightly, but it is interesting to see to what extent the institutions will be able to apply their powers. My opinion is that so far they have not actively used the tools that the state gave them due to the lack of people and the lack of political stability, "the economist added.
According to him, since the beginning of the election campaign, attempts have been made to push the topic of prices to the forefront.
"This was mostly through the speeches of President Iliana Yotova with clear criticism of the caretaker government, and ever since it became clear that Rumen Radev will have his own government, the topic of prices, presented as a crisis situation, began to be pushed," Adrian Nikolov pointed out.
He is of the opinion that the new government is trying to create a crisis with prices because it knows that this is the most clearly understandable and easiest consumer topic.
Adrian Nikolov also stated that in economic science there is no concept of "speculation" and to talk about it would be frivolous.
"I don't know how much scope there is for such a conversation, but what is important to say is that price processes are driven by consumer behavior and expectations. Just talking about inflation makes consumers push their purchases forward, which pushes inflation forward. Just talking about a big price shock in the future creates conditions for price increases even before it happens," he pointed out.
Adrian Nikolov also added that the hefty fines that are envisaged with changes to the Consumer Protection Act of 100,000 euros would be within the power of large retail chains. The fines may be more like a percentage of turnover than a fixed amount, the economist specified, adding that the fines will not be imposed with the aim of destroying the business.
He also stated that there is no need for measures to control market prices with aggressive measures.
According to Adrian Nikolov, if anti-inflation measures are sought, they should be sought elsewhere - such as in the state budget, and not in the CPC and CZP.
"We see positive signals in the budget. The main culprit is the increase in wage costs in the public sector. The first adjustments in the budget should be aimed at reducing the budget deficit, eliminating automatic mechanisms in wages in the public sector and considering a softer mechanism for the minimum wage," Nikolov added.
According to him, the important step that the government should take is to rethink the administration. Municipal administrations are also key, because many municipalities serve a smaller and smaller population, the economist reported.
Nikolov believes that the conversation about major reforms will take place in the fall of 2026 and when the budget for 2027 is being written.
"The clearest pressure at the moment is to increase the health contribution, because there is a sectoral interest on the part of the Bulgarian Medical Union to increase healthcare spending", Nikolov also said.
According to him, the other thing that needs to be carefully monitored in the budget is defense spending in the 2026 budget.
Adrian Nikolov hopes that the government will have a desire for reforms and think more managerially.
"The government enters with a potential 4-year mandate, while it currently has a clear majority, unless it makes a giant blunder or attempts to increase taxes," the economist added.