site.btaInflation in Bulgaria Contained, Experts Say at Financial Forum in Sofia

Bulgaria must keep inflation below 3%, as it aims to join the euro area, Bulgarian Stock Exchange (BSE) Executive Director Manyu Moravenov said at the EXPO MOITEPARI forum. The forum organized by moitepari.bg is taking place Friday at the Inter Expo Center in Sofia.

According to Moravenov, Europe's new trend is to focus on its citizens' savings in financial markets through pension systems. "We'll see whether Europe will be able to cope with this," he added.

The BSE Executive Director believes that interest rates on loans and deposits in Bulgaria will rise to reach the levels in developed countries. The last five years have been positive for the Bulgarian stock market, with the past year being particularly profitable, he noted.

The expert reported that Bulgarians keep BGN 80 billion as deposits in banks, however, many of them are small and cannot be turned into investments. "If incomes continue to grow, which is happening, and if Bulgaria continues to position itself well in the world, I expect a return of the diaspora, which will open up a lot of investment opportunities," Moravenov said.

Investbank CEO Svetoslav Milanov believes that inflation is not a topic on the current agenda because it is contained. He added that there is no general obstacle to Bulgaria's entry into the euro area, as the populations' purchasing power is increasing.

According to Tavex SEE CEO Max Baklayan, 2024 will see the impact of governments' persistent indebtedness. In his words, the average debt burden of European governments is close to 90%, compared to an unprecedented 120%-plus in the US. Baklayan warned: "We are entering a debt spiral from which there is no escape. These debts must be paid somehow. No way can the US government or the EU go bankrupt, but these debts must be paid."

Baklayan said that 84% of savers put their money on deposit in banks, as 73% of them realize that inflation is shrinking their savings. "Inflation of 3% means that in 24 years you will lose half the purchasing power of the money deposited in the bank, so you will pay the biggest tax of your life. Unfortunately, Bulgarians are not financially literate and think that investing is very risky and could lose them everything," he added.

Concord Asset Management Executive Director Natalia Petrova also believes that inflation is under control. She said that being conservative is the reason Bulgarians continue to put their money on deposits and invest in housing.