Study on the Food Vouchers Market in Bulgaria

Abstract

This Study gives a macroeconomic, socioeconomic and fiscal evaluation of the potential liberalization of the food voucher system in Bulgaria. It takes into account the developments in the country after 2012, notably the dynamics of the household income, wages and labor market and updates the justification for liberalization of the system. It assesses and analyses the direct and indirect benefits and costs of the system’s operation in its present form, from the perspective of both government budget as well as the economy and household budgets. For better accuracy and comprehensiveness of the analysis, it also takes into consideration the impact of food vouchers on the informal economy, the value added generated in the domestic economy and intra-family redistribution.

The study outlines three sets of reasons – economic, fiscal and social-political - why we can expect positive developments if monthly voucher allowance is increased and the quota principle is replaced by market-based use of the system.