“It is not clear to me what exactly will be done about prices. Because it is one thing to fight inflation or the growth rate, and another thing to fight the price level. In other words, which of the two will happen at the moment is not very clear“. This was commented on “This Morning“ by Lyubomir Datsov, a member of the Fiscal Council and former Deputy Minister of Finance.
“I leave aside the fact that none of the measures address any of the problems. But if something needs to be done to combine the two topics, in fact, what the budget should do, which is called anti-inflationary policy, is simply to reduce the deficit level. That is, to obtain the effect of the so-called. fiscal tightening”, he pointed out.
„And this is something that the Central Bank and its governor have been repeating for several years now in connection with the relatively high prices and inflation growth in Bulgaria over the past few years. The budget behavior caused by this - i.e. pumping up deficits, leads to exactly what is happening now“, the expert explained.
„So the fact that the Finance Minister has put this set of measures on the table is absolutely in the right direction. I just expect to see how ambitious they will be in terms of the deficit. Will all these measures actually lead to anything, or will they simply restructure spending and remain at the same deficit levels – "This is currently unclear," Datsov commented.
According to him, inflation is caused by the expansion in the budget and the state of the labor market.
„If you are fighting the price level, then you have to make structural reforms. That is, the introduction of some invented concepts such as „fair prices“ will not solve this problem“, the expert pointed out.
„You hold meetings and address the problem with the people who sell at the lowest prices and are the brightest. I personally cannot believe that anything will happen when you take pictures with the people who are to blame for the state of agriculture over the past 30 years and are part of the problems, including the frauds and scams that occur there“, Datsov commented.