“With positive inflation, as in our case, it is 3%, food prices continue to rise. The inflation rate is 2% and we haven’t reached it yet. A drop in inflation means a gradual cessation of price growth, not a reduction. Food prices will remain high, a very severe crisis must be experienced for there to be a decline. This would be unemployment and a drop in the gross domestic product – things that no society wants to go through,” noted Panchev.
BABH starts inspections before the Easter holidays, what will it monitor
In his words, if deflation it happens because of new technologies they make cheaper goods and services, if international trade opens up with a major producer like China, as has happened in the past, prices are pushed down. “However, if inflation comes from the contraction of the economy and bankruptcies, this is a negative phenomenon. We saw severe deflation in the first 6 months after Covid. Queues formed at the labor offices in Sofia,” recalled Stoyan Panchev.
“Possible is the lamb in Italy and Spain now to be cheaper than in Bulgariawe were also in the top 3 in Europe for the price of eggs. In our country, we traditionally maintain high prices for fats, this is not strange“, the economist clarified and explained why this is so. “Our incomes are lower, but there are two reasons for this, to maintain high food prices. First, we are participants in the common market – our producers and traders are also part of it. The most traded goods for export are starting to catch up with the prices of other parts of the open market. It is a question of convergence or the approach of prices to the higher number,” explained the expert.
Bulgarians consume half a million lambs on Easter and St. George’s Day
“Another reason is that most countries operate various programs to subsidize local production. In this situation, there is more supply in those particular markets and that pushes prices down. French cheese, Irish butter are examples of this type of subsidized products. In Bulgaria, this practice is not widespread, but is concentrated among wheat producers with large production,” noted Stoyan Panchev.
“Holidays raise prices, as usual. High demand leads to high prices. Turkey is a good example of buying products more profitably, because it is a country outside the EU and there are no certain regulations there, which helps manufacturers to maintain a lower price. The Turkish lira depreciates faster than the euro, which means that we can find competitive prices there. However, travel also affects the overall price of the market from other countries,” the economist recalled.
“The people have been offering for years lamb through informal economyfor example online, which allows to provide its production at lower prices. This is not news. If you buy lamb from a store, there are costs involved in maintaining the store, advertising, staffing, and that affects its price. There are no such costs for home production. However, a careful look should be taken when we shop directly from a manufacturer and the goods offered are without labels. The quality of this production sometimes surpasses that of mass production,” concluded economist Stoyan Panchev.
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