site.btaCaretaker PM Discusses with Experts Measures against Middle East Crisis Economic Impact

Caretaker Prime Minister Andrey Gurov discussed with Fiscal Council Chair Simeon Djankov; Bulgarian National Bank (BNB) Economic Research, Forecasting and Monetary Policy Department Director Viktor Iliev; BNB Issue Department Chief Director and Association of Banks in Bulgaria (ABB) Secretary General James Jolovski the package of measures being prepared by the caretaker Government in connection with the impact of the situation in the Middle East on citizens and businesses in Bulgaria, the Council of Ministers said on Facebook on Wednesday.

At the meeting, it was noted that at this stage the banking sector is not directly affected by the situation in the Middle East.

"So far, the practice has been to apply broad measures with “helicopter money”, which translate into inflationary expectations. Now we are devoting time and effort to a more targeted approach. The first measure was activated today and is aimed at the most vulnerable, people with the lowest incomes," Gurov pointed out.

"Our aim is, in an open dialogue with representatives of business and the financial community, to present our vision for the most appropriate package of measures to deal with the crisis and to gather as many opinions as possible by discussing the possible scenarios. The measures will prevent business closures and layoffs," the Prime Minister noted. "It is important not only to address the current crisis, but also to be better prepared for the next one," Gurov added.

At the BNB, a macroeconomic forecast is being prepared based on various possible scenarios. "Well-targeted fiscal policy measures can limit the secondary effects," Iliev said.

Djankov supported the development of different scenarios by the Government, which provide flexibility in the measures. According to him, it is particularly useful that the measures are not across-the-board, and at present it would be a mistake to target excise duties and VAT, because once implemented they do not allow flexibility.

Earlier on Wednesday, Gurov held meetings with caretaker Economy Minister Irina Shtonova, as well as with representatives of the Modern Trade Association and the Bulgarian Petroleum and Gas Association in connection with the preparation of a comprehensive package of measures to curb rising prices due to the increase in fuel prices following the onset of the crisis in the Middle East.