Food prices in our country will not fall. Inflation is among the main reasons for this, and with the Easter holidays approaching, it is normal to see a slight increase in the main food items in demand for the holiday. This is what the economist Stoyan Panchev said.
“With positive inflation, as in our case it is 3%, food prices continue to rise. The norm for inflation is 2% and we have not yet reached it. A drop in inflation means a gradual stoppage of price growth, not a reduction. Prices of food will remain high, a very severe crisis must be experienced in order for there to be a decline. This would be unemployment and a decline in the gross domestic product – things that no society wants to go through,” noted Panchev.
According to him, if deflation occurs because of new technologies that make goods and services cheaper, 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.
“It is possible that lamb in Italy and Spain is currently cheaper than in Bulgaria, we were also in the top 3 in Europe for the price of eggs. In our country, we traditionally maintain high prices of fats, this is not strange,” the economist clarified and explained why this is so. “Our incomes are lower, but there are two reasons for maintaining 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.
“Another reason is that in most countries different ones operate 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 non-EU country and there are no set regulations, which helps manufacturers keep the price down. The Turkish lira depreciates faster than the euro, which means that we can find competitive prices there. However, travel also affects the general price of the market from other countries,” recalled the economist, quoted by the “Focus” agency.
“People have been offering lamb for years through the informal economy, for example online, which allows them to provide their produce 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.
