The Trade Deficit and the Freight Rates – Interaction and Negative Effects Induction (on the Example of Bulgaria 2021-2024)

The article aims to explore the interaction between a country`s trade balance and the freight rates. It is done on the example of Bulgaria for the period 2021-2024. The Bulgarian trade balance and trade flows in total and per key trading partners are analysed on the basis of secondary data from official statistical sources. The trends in freight rates are captured through research of primary data. The price levels are fixed on account of representative real deals and on account of the spot prices from cargo platforms. On the basis of the displayed trends, the hypothesis for the interconnectedness between the trade deficits and the higher import prices is proved. The mechanism of market forces acting on the freight transport market that account for this interaction is portrayed and explained. The effects from the higher import prices on major macroeconomic indicators are registered and the need for a balanced trade and convergence between the import and export prices is pointed out as major challenge for Bulgarian foreign trade policy.