Why are services seeing the most drastic price increases?

According to data from the National Statistical Institute (NSI), the most significant inflationary pressure comes from the services sector. Hotels, restaurants, and accommodation have seen an increase of 20 to 30% over the last two years, driven by increased demand following the pandemic and changes in VAT rates.

"The discrepancy between statistical data and people's perception is due to the fact that the prices of goods change monthly, while incomes grow more slowly," commented Dr. Svilen Kolev.

Where is the strongest growth felt?

  • Hairdressing and personal care services;
  • Home and car repair and maintenance;
  • Driving courses;
  • Services linked to wage and rent increases.

Forecast for the second half of the year

Despite a slight decline in food prices in June (seasonal price drops for fruits and vegetables), experts expect new price pressure. The main factors include:

  • Rising costs for electricity and heating;
  • High fuel prices due to geopolitical tensions;
  • An increase in toll sticker (vignette) prices effective August 1st;
  • Changes in the excise tax calendar for tobacco products.

Although annual inflation has slowed to 5.4%, trends indicate that price growth will continue, albeit at a more moderate pace in the coming months.