Financial analyst: The expensive dollar will have a negative impact on the import of raw materials –

The war in Ukraine and its consequences are the main reason for the leveling of the euro against the dollar. For the first time since the start of the new millennium, we have seen parity between the world’s two major reserve currencies”. This was stated by economist and financial analyst Boris Petrov in an interview for BGNES

The military conflict has negative consequences for the whole of the European Union. The energy crisis has also had its negative impact. It hit the EU much harder than WE“said the financial expert.

He underlined that the prospects for economic growth in the EU are “seriously deteriorated“: “This will probably be seen in the third and fourth quarters of this year.”

The uncertainty surrounding Europe leads to an increase in demand for WE currency, perceived in these turbulent times as a safe haven.

Interest rate differentials in the euro area and WE also contribute to the current euro-dollar parity situation.

An interest rate differential opens in Europe and America. WE interest rates were raised to 1.25%. It is expected that at the next Fed meeting in two weeks they will be increased by another 1%, which is unprecedented. In the Eurozone, this step should be 0.5%, so the interest rate will become 0%. All this goes in the direction of weakening euro“, explained the financial analyst.

Regarding how this parity will affect the Bulgarian economy, especially on exports and imports, there is no single answer. For example, the appreciation of the euro against the dollar can have a positive effect on tourism, especially for tourists who pay for their services in WE currency. “Prices for tourism services will become cheaper for consumers whose income is in dollars“, underlined Boris Petrov.

However, this is not the case for imports. “A large part of Bulgarian exports has a significant energy component. The appreciation of the euro against the dollar will have a negative impact on the import of raw materials and, above all, fuels“said the financial expert

According to him, there will be no negative consequences for the Bulgarian economy of this parity, because it is based on the euro. “We can expect a mixed effect“, summed up Boris Petrov.

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