According to statistics, inflation in Bulgaria is slowing down, but for most households, the feeling is the opposite: life is more expensive than a year ago, and prices are not going back. Data point to a cumulative increase in the consumer basket of nearly 43% over five years, with key expenses – such as housing and food – seeing even greater growth.
The macro picture: inflation is cooling, but after a 40+% jump
According to official data, annual inflation in 2026 is significantly below the double-digit levels of 2022–2023, and the average annual rate for the last 12 months is hovering in the range of about 4–5% – values that economists describe as "closer to normal."
Behind this "normalization," however, lies a heavy accumulation: over the last five years, cumulative inflation has exceeded 40%, meaning that the same amount of money today buys noticeably fewer goods and services than it did in 2020–2021.
As a result, the current lower rate of inflation comes on top of an already "raised" price level – macro-stabilization does not undo the jump, it only stops its further acceleration.
Where it hurts most: food, housing, transport
The official general index masks large differences between individual groups of goods and services. While some durable goods are increasing in price moderately or even becoming cheaper, expenses for food, housing, and transport – the classic "trio" in every family budget – remain persistently high.
Prices of basic food products such as bread, dairy products, meat, and vegetables are tens of percent above levels from five years ago. For a household where more than a third of income goes toward food, the effect of this inflation is felt much more strongly than the average values suggest.
Housing costs are also a factor: home prices are rising significantly faster than incomes, and rents are following the upward trend. In big cities, the monthly rent for a one-bedroom apartment often approaches or exceeds half of the salary in many sectors.
To this is added transport – fuel, subscription cards, car maintenance – which rose sharply after 2022 and, although partially corrected downward, have not returned to old levels.
Why "inflation is falling," but bills are not
Inflation measures the speed of price increases, not the price level itself. When it is said that "inflation is falling," it means that prices are growing more slowly – not that they are going back.
If bread has gone from 1.20 BGN to 1.80 BGN in two years, and then inflation for that product falls to 0–1%, the price remains around 1.80 BGN – for the household, the shock of the jump remains, even if the macro indicators appear "tamed."
A similar picture is observed with electricity, heating, and fuel: prices may "freeze" at a higher level, but they rarely return to old values. Thus, the new price level becomes a permanent reality, and inflation "falls" only in statistics.
An additional effect comes from the structure of the consumer basket: average inflation includes goods that increase in price only slightly or become cheaper (e.g., electronics, some services), while people feel most strongly those categories that continue to rise – food, rent, bills.
Salaries, purchasing power, and pressure on the middle class
Nominal salaries in Bulgaria have been growing in recent years, supported by a shortage of staff and a general increase in incomes. The problem is that inflation and the rise in housing prices are "eating up" a significant portion of this growth.
When prices have risen by over 40% in five years, and incomes by, for example, 30–35%, the real purchasing power of households is actually shrinking. This is felt clearly at the end of the month: more money in absolute value, but less remaining funds after paying fixed expenses.
The hardest hit are young families and households in smaller towns, where salaries lag behind those in the capital, while fuel and food prices are similar. Combined with expensive housing, this delays moving out from parents and starting one's own household.
The psychology of inflation: "personal" vs. "official"
Economists have long spoken about the difference between "official" and "personal" inflation. The former is a statistical average indicator for the entire economy; the latter is the subjective feeling of a specific person, formed by the goods and services they actually buy.
With lower incomes, a larger share of the budget goes to food, electricity, water, and rent. It is precisely these items that have risen the most, which means that the "personal inflation" of many families is significantly higher than the officially reported one.
Periodic shocks – a sharp rise in fuel or basic products – leave a lasting feeling of uncertainty, even when the growth rate calms down later. The memory of paying "hefty" bills or the inability to fill a shopping cart with the same products weighs more than dry statistics.
This creates a disconnect in public debates: while the government and institutions speak of "tamed inflation" and "macro stability," people at the store checkout and in front of a bank loan see only that life is permanently more expensive and is not going back.
What could bring real relief
From a macro perspective, stabilizing inflation at levels around 3–4% is a positive signal – it reduces the risk of a "price-wage" spiral and new major shocks. But for households, real relief comes from three other factors.
First, sustainable growth in real incomes – meaning salaries and pensions growing faster than prices. Second, a more accessible housing market – through more balanced price growth, more supply, and more transparent mortgage conditions. Third, more predictable food and energy bills – including through better competition and clear regulations.
Until these three components improve simultaneously, the feeling will remain the same: "the statistics say everything is calming down, but in the wallet, it's not yet visible."