The economist predicts a crisis that will lead to a reduction in wage costs or layoffs in our country
Burgas, Bulgaria04 Nov. 2023, 10:05 6760 read 6 comments
A situation is emerging in which we will observe serious processes in the labor market. I believe that unemployment will increase, which to some extent will have a negative impact on credit as well.
This is predicted in Burgas by Kuzman Iliev, economist and financial analyst, founder of the organization “Bulgaria can do it alone”.
The reason for this, it became known from his words, lies in the increasingly distinct processes in the world economy, in which revenues are shrinking and expenses are increasing.
In our country, this will lead to two things – a reduction in wage costs or layoffs, Iliev pointed out during the ninth National Conference of the National Real Estate Association.
“If a person gets depressed and begins to think that no one is thinking about him, no one is calling him for his birthday, let him try not paying his mortgage payment, for example. Then he will suddenly realize that someone is very interested in him .
That’s where we’re headed – to a slightly more complicated time. The situation we are witnessing in the United States of America is extremely unnatural and abnormal. There, the interest rate on the mortgage loan is 7.5 percent – a record historical peak for interest rates, and in Bulgaria they are below 3 percent.
This is very characteristic of a country that is on the periphery of a circle. In our case, it is the Eurozone.
The center always exploits the periphery – this can be called, if you want, currency imperialism, but I use my own term “blood donation economy”, said Iliev, quoted by Pariteni.bg.
When you are on the periphery, inflation is always higher, the processes always come more slowly, but they hit harder, he commented, giving an example of the interest rates that the European Central Bank raises, but this is not felt in our country .
“Strange – the transmission is not working. But all economists are aware that this transmission is not working because we, being on board, are not closely following the Eurosystem yet.
We have our huge deposit base and this money is currently available to the banks. But that will change the moment security is felt very strongly by our partners.
We see the Germans at the moment – they have been in recession for several months now. They cannot turn things around to positive growth there, and these are our main trading partners. We export the vast majority to them,” said Kuzman Iliev.
He added that these processes will also affect Bulgaria – interest rates will rise against the background of decreasing disposable income.
“This will be felt by those who today have some other lease, mortgage loan, earn 5,000-6,000 BGN salary, work a lot, but at some point it will turn out that the monthly installment on the loan has increased by 150-200 BGN and the bill won’t come out.
In the US, this is happening and it gives the impression that savings are being used and credit cards are “booming”, that is, the buffers are being eaten up.
In my opinion, the Bulgarians also currently have some buffers and keep their money in deposits, because there is nothing to invest it in,” Iliev said.
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