site.btaEconomists Deem COVID Financial Aid to Households Ineffective

May 25 (BTA) - The government's financial aid to
households during the pandemic-induced crisis is ineffective in
macroeconomic terms, according to the Economic and Public
Policies Council. Its conclusions are based on a sociological
survey and macroeconomic analysis of that aid, the Council's
Vladimir Sirkarov told a BTA-hosted news conference on Tuesday.

A 2.5 per cent increase in Bulgaria's GDP is the most optimistic
 scenario for the impact of that aid, which is further
diminished when inflation is factored in, the economists said.
In addition, financial aid will not obliterate income
inequalities, but it can shape a misinformed expectation that
the State will keep handing out money.

The Council's survey, based on a US model, looked into how
Bulgarians would spend 1,400 leva in COVID aid to over-18s, the
total amount being over 8 billion leva. The economists stressed
that such a sum would not have a substantial impact on the
economy and people.

The Trend polling agency conducted a face-to-face survey
commissioned by the Council between April 13 and 19, asking more
 than 1,000 people: "If the State grants 1,400 leva per person,
what would you do with the money?" The two largest groups of
respondents, 28 per cent each, would spend it on home
improvements and payment of utility bills; 27 per cent would buy
 food; 25 per cent would opt for a trip or a holiday; 23 per
cent would save the money; 21 per cent would pay off their bank
debts; 13 per cent would share the money with friends or
relatives; and 11 per cent would invest in education. A mere 2
per cent of respondents said they would invest in stocks and
bonds. Based on statements that some respondents would pay off
their debts to banks and lending institutions, the economists
estimated them at about 900 million leva.

Ahead of the July 11 parliamentary elections, the Council urged
Bulgarians to be critical of the parties' programmes, to think
about their possible impact and see through populist messages.
The economists warned that there are political motives behind
handouts and grants, which cover up the State's false altruism,
while politicians reap short-term gains. NV/DD





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