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Hard months await us, an economist with a dire forecast

“Fear of inflation leads to inflation. Inflation started long before the war in Ukraine. The huge liquidity, the huge liabilities, the debt that was accumulated, the monetary policy with very low interest rates – all this accumulated excess liquidity. Inflation can only be controlled by recession. It should be known that there will be a recession and reduced consumption. The recession will put an end to inflation in Bulgaria and globally,” said the economist and lecturer at UNSS Assoc. Viktor Yotsov in the program “The Day ON AIR”.

In his words, inflation has been kept from exploding for a long time, but because of the war in Ukraine, it is accelerating globally. And to a large extent, inflation in our country has been imported, he believes.

“We cannot tame inflation with an inept fiscal policy. A large part of the measures feed it, they are not anti-inflationary”, pointed out Prof. Yotsov and added that the people who need it the most should be helped with a specific policy.

Fuel rose in price before the unfair measure of 25 cents came into effect. Inflation ate away the pension increases before they were even received. Many of the parties are unnecessarily scaring people with tales that if a government is not formed, the end of the world will almost certainly come. Better a terrible end than horror without end,” the economist explained to Bulgaria ON AIR.

“In the autumn, we are waiting for an advance amount of BGN 2.5 billion under the Recovery Plan. 7-8 laws have passed in committees, there is readiness for the others. During the caretaker government, nothing prevents the administration from working and preparing these laws, to enter with the new parliament,” said Prof. Yotsov.

He would not be surprised if another budget update had to be made at the end of the year.

“By October 31, it is almost certain that there will be no government formed,” noted the economist.

“32% increase in gas in a summer month is severe. Technically we can work without Russian oil as long as we have regular supplies. The contract with Gazprom expires at the end of this year. The payment must be discussed and first of all the opinion of employers. They are lying to us about the prices and regular supplies of liquefied gas. Azerbaijani gas is not that much cheaper,” commented Prof. Yotsov.

Finally, the guest pointed out that he expects problems with heating and hot water in Sofia, as well as that we are facing difficult months. Prof. Yotsov is not a supporter of setting a ceiling on prices. In his view, a voucher or coupon program would be better if things got out of hand.

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