Prices are rising – what are the main causes of inflation

Prices are rising significantly. Data of the National Statistical Institute shows that, compared to August, the prices of products and services has risen by 0,4%, while the increasing percentage for the last year is 4,8%. People admit that they have already given up some pleasures in order to meet their basic needs and expect specific measures from the politicians.

They see the market inflation as lighter shopping bags, fewer products, and only the most essential.

“I assess by priorities when shopping, which means I only buy the most necessary. I no longer indulge in many things - amusements for example.“ Silviya Paunovska says.

„I`m a pensioner and everything is difficult. Sunflower oil is the most expensive, but it is also the most essential.“ Tsvetanka Dimitrova says.

In my opinion, dairy products are the most expensive. I won`t even talk about the heating and electricity.“ Rumen Avramov says.

The first cause for the inflation: the policies for saving the businesses from the crisis lead to printing more money.

"Money supply is increasing. The size of products and services, bought with this money, remains more or less the same. There are no significant changes there. As a result, the money used to buy these goods, become practically cheaper.” Adrian Nikolov, an economist from the Institute for Market Economics, explains.

The prices of commodities are important as well. There is also delayed inflation.

"From 2015 to 2019, there was a rapid wage increase, of swift labour market expansion, which brought a rise in the households’ income, and the resulting increased purchasing power always reflects with some delay on overall consumer prices.” Adrian Nikolov explains.

The final price of bread is 2,3% higher, cheese went up by close to 2%, eggs are almost 5% more expensive, sunflower oil is more than 1% costlier and the price of cabbage has gone up by more than 11%. What can be done?

Genrally, the state has relatively few tools to influence the structure of income. Social policies are the main instrument for that. The pensioners‘ benefits are also of importance. What is usually discussed in this case – of course, the minimum wage, although we should keep in mind that the increase of the minimum wage usually does not boost the average income.“ Adrian Nikolov explains.

"Hopefully, something would be done so that the people can be well.“ Tsvetanka Dimitrova says.