Various factors “feed” inflation. Undoubtedly, the biggest impetus at the moment is in transport and fuel. The other important topic before the country is the budget. This expansion in consumption, which comes through the budget, a large deficit, growth in payables, growth in lending. Lending simply breaks all kinds of records and comparisons with the European Union. All this leads to huge consumption, which pumps up prices. This was said in an interview for the program “From the Day” on BNT by Petar Ganev - senior researcher at the Institute for Market Economics, quoted by novini.bg.
“We are also observing a serious price increase in the region. It is precisely the countries with very high deficits, such as Romania, that are also at the top in terms of inflation. The two things are related,” he added.
The news of the excessive deficit may have a disciplining effect, the economist believes. According to him, we are currently at a stage where we can take the necessary measures and exit this procedure. What needs to happen in the budget is to control spending.
“We will see the EC's arguments on Wednesday. What we see in the spring macroeconomic forecast, which came out a week ago, is that the deficit for last year was 3.5%. It has not been revised for the previous years. We know that it is 3.5 and most likely with the defense discount it will enter 3%. However, inertia, with a prolonged budget, without clear measures and a new framework voted on, leads to a deficit between 4 and 4.5%. Their forecast is for 2026 and 2027 and it is based on the fact that we do nothing about the issue. Our argument would be that we will do it because there is a new government that can submit a budget. Here the responsibility is now on the new government: to submit a budget in which it very clearly shows that it is changing the trajectory”, explained Petar Ganev.
“We are currently in such a macroeconomic situation that we should not have a deficit”, the expert pointed out.
Petar Ganev explained that we did not enter the eurozone with a lie. “There were fiscal measures that were used in recent years, but these are not lies. To withdraw all the money from state-owned enterprises, to pay the banks in advance, to pay the mining companies in the case of underground resources once, to make a one-time payment for gambling when the rules change, to give money to the Bulgarian National Bank,” he gave an example, explaining that these tricks would be used regardless of whether we had to meet the criteria for membership in the eurozone or not.
"These are some requests in the direction of how to control expenses, which is not bad in terms of direction, but in terms of scale - it is not something special, especially the one about the party subsidy. The big news that we are expecting is undoubtedly the budget that will be presented by the Minister of Finance. We are no longer in a situation in which the Minister of Finance is a weak figure without a majority," he commented on today's requests from the Bulgarian National Bank.