We are facing the winter with a relatively strong recovery from the shock of last year's pandemic, and we are also facing high inflation, this time not just with an isolated increase in some energy prices, but with a much more serious overall increase in prices. This was said by the economist Lachezar Bogdanov in an interview for the Bulgarian National Television.
"The question is how long we will be in the recovery phase next year. Currently we had a shock of consumption, then for a number of reasons there was a calming, now we have something like Christmas came early, but this growth is driven by consumption, the question is when we will have a more serious change in investments," Bogdanov added.
Shteryo Nozharov - economic adviser at BIA announced that during the pandemic period the consolidated debt in the General Government sector has increased by 30%.
"The economy has flashes of recovery, GDP is growing much less than expected. We are not aware of whether energy prices will calm down, we are not aware of whether there will be a new shutdown in 2022 due to the new strain. Vaccination levels remains low, so the effects are greater, we also have effects from international markets and the Eurozone, these things are shocking," Nozharov added.
If we do not start talking from now on, in the period between 2025-2030 the problems will press us and can lead to a serious shutdown of the economy, Nozharov warned.
"The paradox is that the more debt we take, the more government debt decreases as it is passed on to citizens. Debt increases inflation, inflation increases the collection of public revenues, and debt decreases at the expense of citizens' personal disposable income," explained Shteryo Nozharov.
"When the economy is in recession, in crisis, when the minimum wage increases, unemployment increases. This shows that in the crisis, the minimum wage should not increase," said Nozharov, citing an analysis of the Bulgarian economy for the last 20 years.
"The most sensible thing is to develop a mechanism that provides predictability. When the economy is developing well, then the economy can afford a little more increase in the minimum wage. This should be a mechanism based on reasonable and objective indicators around which to have a consensus", added Bogdanov.
Regarding the reduction of the administration by 30% announced by Asen Vassilev, Bogdanov said that we are now in a situation where most of these people will find work in the private sector, as they are qualified.
According to Shteryo Nozharov, in order for this process to be sustainable, the structure of the new government must be seen.
