site.btaUPDATED Economy Minister Praises Caretaker Cabinet's Contribution to Inflation Decline

Caretaker Minister of Economy and Industry Nikola Stoyanov highlighted and described as a first small victory the Cabinet's contribution to the first instance in nearly two years of a decrease in inflation in Bulgaria. "There is still a lot to be done in this direction and I hope you will help me to find the most credible solutions," Stoyanov said in his address to the participants in the fourth Business in the 21st Century national forum.

This year's theme of the forum is "Recovery and resilience after the crisis". The event was organized by the Business Faculty at the University of National and World Economy, in cooperation with the Union of Economists in Bulgaria and the Scientific Research Center for Business Competencies Development - Innovations and Competitiveness (u2b).

The monthly inflation in Bulgaria in October 2022 was 0.9% compared to the previous month, while the annual inflation, compared to October 2021, was 17.6%, reported the National Statistical Institute (NSI). This is the first decline in annual inflation since January 2021, when the indicator fell to minus 0.6% from 0.1% in December 2020, according to a NSI reference.

Macro indicators today are reaching historic highs, the minister pointed out, adding that for 2021, in percentage terms, GDP growth, post-pandemic, was the highest since 1995, export growth was strong, and Bulgaria was among the top five countries in the EU in export growth, and unemployment remained at historically low levels in the crisis. The minister stressed that in 2021 foreign investment in Bulgaria was worth just over EUR 1.2 billion.

However, these good indicators will not matter much if Bulgaria fails to contain the continuing rise in prices, the minister said.

Speaking on the central topic of today's discussion, Minister Stoyanov reminded the audience that the Recovery Plan was created at the height of the COVID-19 crisis to help EU countries support the companies and people affected by the pandemic. This is a plan for the future, its funds amount to EUR 723.8 billion, the minister said, pointing out that this huge amount should contribute to reforms and investments in the green transition, digital transformation, health and support for young people. The Economy Minister pointed out that under Bulgaria's Recovery and Resilience Plan, EUR 6.3 billion of grants are earmarked for this country for green and digital transition. He noted that the launch of the Plan coincided with the beginning of a new crisis caused by the military conflict in Ukraine, and now the various crises are compounding. In the Minister's words, this is a huge test for both the European and global economies, which for the first time since the Second World War are facing so many challenges.

Minister Stoyanov said that Europe is highly dependent on the supply of raw materials and products from third countries and stressed the particular importance of addressing the issue of strategic autonomy and diversification of supply for Europe. This puts many conditions in front of the Recovery Plan that were not foreseen when it was created with heightened expectations, according to Stoyanov. He added that the political instability in Bulgaria has not helped the Plan, either. "We slowed down and public questions started piling up about the Plan even before it was launched," he said.

He stressed that the Plan aims to multiply every euro invested in the Bulgarian economy as many times as possible. This is also linked to the focus on the development of the knowledge-based economy and high value-added sectors, for which, according to the minister, the people of science have a key role to play.

The drafting and implementation of key documents, such as the National Recovery and Resilience Plan and the National Development Programme BULGARIA 2030, are first and foremost an opportunity for Bulgaria, said President of the Bulgarian Industrial Association (BIA) Dobri Mitrev in a statement read by BIA's Economic Adviser Shteryo Nozharov. Funding from these documents should reach businesses and citizens to the fullest, in order to have real and visible results in improving economic and social indicators.

We need effective solutions to increase the resilience, durability and preparedness of European economies for the series of challenges and opportunities of the modern world, said Svetlin Iliev, Deputy Chair of the Union for Private Economic Enterprise, in his welcome address. Iliev spoke about the package of reforms and public investment projects needed to receive support under the Recovery and Resilience Facility as an EU Member State.

According to the Chair of the Bulgarian Industrial Capital Association (BICA) Vassil Velev, the Recovery and Resilience Plan was aimed at recovery after the COVID crisis, but "we have recovered and Bulgarian business has successfully joined the shortening of supply chains". Velev emphasized the good industrial growth here. The Head of BICA stated that Bulgaria now has the opportunity to correct one of the mistakes made in its national plan, specifically the battery project, and this can be done this December, when there will be a "window" for a package reconstruction. The industries' proposal is to channel some of the project funds to businesses as a grant scheme for building renewable energy storage systems.

The topic of "Recovery and resilience after the crisis" will be particularly relevant not only in the next five or ten years, but in the next 50 years and until the end of the century, said Dimitar Blagoev, Dean of the Business Faculty at the University of National and World Economy, "because we have to think how to go on with all the crises that have accumulated".

Businesses need a realignment, we need economists to rethink things for the economic transformation that is coming, said President of the Union of Economists in Bulgaria Prof. Dr. Tatiana Hubenova-Delissivkova. "The cost of the transition to decarbonization is high and without a new way of planning or new business models, this [transition] will not happen," she concluded.