site.btaCITUB President: Some Prices Can be Controlled by Stopping Speculation

Confederation of Independent Trade Unions in Bulgaria (CITUB) President Plamen Dimitrov told BTA that he remains pessimistic about the reduction of VAT on bread, even though there are some indications of a drop in its price. 

"There is no argument why tomatoes currently cost BGN 4 per kilogram They are not greenhouse tomatoes, they are from the field, and no matter how much the picture has changed, there is no way they cost BNG 2 last year, and now BGN 4," he said, adding that the same applies to oil. "There is as much sunflower as you want, its current price is higher, but it has not yet entered oil [on the market], there is sunflower from last year. The prices of at least 10-15 commodities can be better controlled and those should be from the 32 that we buy daily. That way we can really show people that we help them," noted the CITUB President.

"It is wrong to handle taxes in this way. When it comes to differentiated VAT rates, they do not affect the general price level," commented Dimitrov.

Dimitrov also said that he approves of some of the anti-crisis measures of the government, such as those for working families with children, but others, he argued are quite palliative and money will be spent on them, which is meaningless. "This is, for example, the BGN 0.25 [discount per litre]for fuel, which is forecast to cost up to BGN 150 million, and in fact no one will really feel it as any real benefit. When they talked about the BGN 0.25, the price of diesel was 3.20, now it is BGN 3.70 - 3.90. This is a meaningless measure."

The CITUB President predicted 20% inflation by the end of the year and a slight easing, most likely in the last quarter.

Dimitrov argued that the state budget was underestimated, with eight billion in capital expenditures. He explained that the budget has buffers and does not create issues regarding the national debt, the deficit, or its default. In his opinion, the budget will be met, even over-met as a smaller deficit, with more revenue and less spending. Dimitrov believes there should be a second budget update if there is a government by the end of the year. This government that comes to power will have reasons to ask for a new update of the budget and to foresee additional expenses before the winter to support those who remained unsupported until that moment, he commented.

Dimitrov pointed out that people should be assisted at the current prices for heating, gas, and water, and that not only about 300,000, as currently assisted, but twice as many people, for whom funds should be provided to get them through the winter.

"Challenges continue - neither the war will stop anytime soon, nor will fuel prices calm down. Therefore, we must continue to prepare to live in a relatively high inflation, which implies more frequent and more significant compensation of incomes," said Plamen Dimitrov.

He pointed out that, with pressure from CITUB, BGN 760 million more were allocated, two-thirds of which was money for salaries. In this way, nearly half a billion BGN have been added to help increase the salaries of those working in secondary education, as well as support small increases in the energy expenditure standards in the systems of social assistance, children's and school health care. Dimitrov explained that with this money a large part of those working in the budget systems received between 10 and 20% salary increase.

"At the same time we couldn't cover everything we wanted, there were a few important systems left that didn't get any increase - the agriculture system, the Food Agency, hail control and the Forestry Agency. There are similar problems in both revenue administrations - The National Revenue Agency and the Customs", said Plamen Dimitrov.

He pointed out that the main problem is the minimum wage, which has not reached levels to cover inflation. "People feel it, even those who will receive a 20% increase in their income will be compensated for half of the real inflation," commented the CITUB President.