For nearly a year now, the Government has been making soothing noises about inflation. First, after last year’s floods, there were the pleas to wait until the harvest before jumping to conclusions. When the harvest was predictably poor, there were the hasty calls to track and cap the prices of foodstuffs. As inflation relentlessly went up, in autumn last year Economy Minister Petar Dimitrov kept talking, unconvincingly, about deflation as if it were just around the corner.

It’s spring again and prices are showing no sign of slowing down, reaching 14.2 per cent year-on-year at end-March, although we are told now that in summer that will change, that last year’s spike was a one-off occurrence, which had little to do with the Government’s policies and everything with an unfortunate set of circumstances, causing last year’s drought.

The truth is that food prices, which account for 35 per cent of the consumer basket, are not the only reason for the increase. The impact of the shaky American economy and rising fuel prices worldwide has been kept down in Bulgaria – for now, but one has to wonder for how much longer?

It’s not just Bulgaria that finds itself in this situation, with the European Union’s statistics bureau Eurostat reporting inflation in the bloc at 3.8 per cent. Here too food prices had the biggest impact, growing by 6.2 per cent in the last year, so it is hardly a problem just for Bulgaria and it might take more than just one good harvest to bail the current Government out.

So far, the Cabinet has kept rising energy prices from having a major influence, but that is expected to change in July, when the prices of heating, electricity and water utilities will go up, triggering an inevitable chain reaction in the cost of production of all goods, which will be reflected in rising prices.

That’s hardly advanced economics, just common sense, a result of the strain most households are feeling on their budgets. So it should be no surprise then that the labour unions have demanded a 17.6 per cent increase in wages earlier this week, showing that they had little faith in the Cabinet’s promises of curbing inflation. On the other hand, doing so would only create additional pressure on prices, pushing them even higher and defeating the purpose of wage hikes.

So what does the Government do in this situation? Keep mum, of course.

While it is true that it does not have as many policy instruments at its disposal because of the currency board system, the way it has dealt with the situation in public was to sweep it under the carpet and hope it goes away. I was not in Bulgaria in 1997, when civil unrest brought down the previous Socialist government, and things have not quite progressed now as far as they did then, but one cannot miss the alarm bells that spring up when the topic of inflation is brought up in conversation with a Bulgarian. Sure, Bulgaria is in a much better shape than it was a decade ago, but it would be foolish of the Government to think that the problem will go away on its own. Or that it will not pay the (rising) price of believing so when the next elections come around.