“We introduced the euro in a very favorable environment and it was a disinflationary environment for us”, said Iliya Lingorski, member of the Governing Council of the BNB, in the program “Wake up” on NOVA. He noted that the data for February and March show inflation “just over 2%”, which is below the average level for the eurozone of 2.5%.
Lingorski commented that the economy is currently facing a price shock, mainly caused by the increase in the price of oil on global markets due to the conflict in the Middle East. According to him, Bulgaria is in a “comfortable situation” in terms of security of supplies and fuel quantities, but the main risk is how the price will be passed on to other goods and services.
Inflation forecasts and scenarios
The BNB is working with three main scenarios for the development of inflation in our country - baseline, unfavorable and highly unfavorable. “It seems that we are currently more towards the unfavorable scenario”, Lingorski pointed out. This option envisages:
• 2026: 4.4% average annual inflation;
• 2027: 4.6%;
• 2028: 3.8%.
He stressed that these forecasts depend on the scale and duration of the oil price shock. At the moment, there is some calming of the markets, but the levels remain significantly above the average for last year.
Fiscal discipline and state aid
Lingorski gave a positive assessment of the government's actions regarding the fiscal space. He made a comparison with 2022, when the aid was “helicopter money”, scattered throughout the economy.
”The measures are now well measured, calculated and targeted precisely at the segments of society that are most vulnerable,” he said. According to him, financial discipline is currently of key importance, as it instills confidence among investors and is an important tool for macroeconomic stability in preparing our country for full membership in the eurozone.
The member of the BNB Governing Council added that the central bank monitors data in real time and prepares its analyses as close as possible to the dates of the European Central Bank meetings in order to guarantee the accuracy of assessments in the dynamic international environment.