In Search of an Answer to the Question of Recognizing Optimal Tax Policies for Overcoming COVID-19 against Accelerated Economic Recovery of the Bulgarian Economy
In Search of an Answer to the Question of Recognizing Optimal Tax Policies for Overcoming COVID-19 against Accelerated Economic Recovery of the Bulgarian Economy

Summary/Abstract: In this paper, we analyze how bulgarian economy is addressing the COVID-19 pandemic. The spread of the COVID-19 virus in Bulgaria has created enormous strains on our healthcare system and driven government to take extreme measures to contain the virus, including the lock down of most citizens and shutting down most economic sectors. Due to these unique challenges coming from our economy that was weak already in 2020, Bulgaria faces a global crisis of unprecedented impact and high uncertainty about the recovery process. Moreover, we review the estimated economic impact of COVID-19, as well as the expected recovery and its time frame. This crisis in Bulgria created a supply shock added to a forced shutdown of the economy. As such, traditional tools to boost credit demand and usual demand-side policies alone are likely to generate little positive effect, as any aggregate demand that may be incentivized will not likely be followed by aggregate supply. A combination of demand-side and supply-side measures may prove to be more effective to boost the recovery after the pandemic. Finally, we discuss the optimal policies to overcome the situation and advance towards economic recovery and the stabilization of public finances

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