Bulgaria: Inflation picks up in July
Latest reading: Inflation came in at 5.3% in July, up from June’s 4.4% and hitting the highest inflation rate since November 2023. Price pressures for food—representing roughly a third of the consumer basket—rose for the seventh consecutive month, accelerating at the quickest pace in nearly two years, in line with the ongoing impact of the restoration of standard VAT rates on bread, flour, restaurants and catering in January. Moreover, price growth for housing and utilities strengthened from June, and prices for transport fell at a softer rate.
The trend pointed up, with annual average inflation coming in at 3.2% in July (June: 2.9%). Meanwhile, harmonized inflation rose to 3.4% in July from June’s 3.1%.
Lastly, consumer prices increased 1.69% in July over the previous month, picking up from June’s 0.44% rise. July’s figure was the highest reading since January.
Panelist insight: EIU analysts commented on the outlook:
“We expect inflation to ease in the coming months, supported by the euro’s (and thus the lev’s) appreciation, which is lowering imported price pressures, and by the EU-US trade agreement, which means that we do not expect retaliatory EU tariffs. Weaker than expected growth in 2025—particularly driven by a slowdown across the EU—could lead to lower than expected inflation.”