Bulgarians Join Balkan Protest Against Soaring Food Prices
Bulgaria has joined Croatia, Bosnia and Herzegovina, and Montenegro in organizing protests against rising food prices
Kalin Hristov, former deputy governor of the Bulgarian National Bank and former finance minister, expressed concern over the public discourse on key economic issues, describing it as resembling a heated debate between football fans rather than a rational discussion. Speaking on bTV, he criticized the lack of substantive dialogue on topics like fiscal policy and eurozone accession, arguing that many have resorted to repeating slogans rather than addressing the core problems.
Hristov pointed out that Bulgaria has adopted a policy of persistent budget deficits in recent years, which he described as unsustainable. He argued that before the COVID-19 pandemic, the country did not follow such an approach, but in the aftermath, it shifted towards systemic deficits, leading to ongoing debt accumulation. He emphasized that from 2019 to 2024, social spending has continuously increased without corresponding tax hikes, resulting in the suppression of public investment.
Explaining budget reporting methods, Hristov noted that there are two types of financial data: cash-based and accrual-based. Bulgaria operates with the cash-based system, which tracks immediate revenue and expenditure. However, he clarified that the accrual basis provides a more accurate financial picture, capturing outstanding obligations that are not reflected in the state’s central bank accounts. He stressed that while the Bulgarian National Bank manages a single account where all cash-based transactions are recorded, unpaid government liabilities do not appear in these figures.
Regarding Bulgaria’s fiscal targets, Hristov expressed doubt that the country could achieve a budget deficit of 3% by the end of 2024. He argued that, given current trends, the likelihood of meeting this goal is approaching zero.
He also highlighted Bulgaria’s challenges in meeting eurozone entry criteria, particularly the inflation requirement. He pointed out that as early as December, it was evident that Bulgaria was not meeting the necessary inflation benchmarks. Drawing a comparison with Croatia, he noted that between 2015 and 2021, the country met the inflation criterion consistently each month. However, when the final assessment period arrived, inflation began to rise, complicating their entry process. He emphasized that Bulgaria has historically struggled to meet these conditions and underscored the importance of finalizing 2024’s economic results before drafting the 2025 budget.
Source: bTV
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