Page 62 - bne IntelliNews Southeastern Europe Outlook 2025

4.3 Inflation & Monetary Policy – Bulgaria
Bulgarian inflation was on a downward trend through 2024, but still remained high compared to the level required for entry to the eurozone. The IMF has projected that consumer price inflation will reach 2.6% in 2025, down from an estimated 2.8% in 2024.
According to the latest available statistics office data, consumer prices in Bulgaria rose by 2.1% in November 2024 compared to the same period of 2023. Month on month, the Consumer Price Index (CPI) rose by 0.6%.
Consumer prices stood at 4.7% in December 2023, while in November 2023, annual CPI inflation was 5.4%.
The fastest annual increase in prices in November 2024 was for restaurants and hotels, which rose by 7.5%. The prices for education moved up by 7.1%, followed by alcoholic beverages and tobacco (6.4%) and other food and non-alcoholic beverages (4.1%).
In contrast, communications experienced a downturn, with prices dropping by 3.9%, while transport costs decreased by 3.4% y/y.
The inflation rate since the beginning of the year as compared to end-2023 was 1.8%.
The National Statistics Institute’s (NSI's) data on the Harmonised Index of Consumer Prices (HICP) showed a 0.3% monthly increase and a 2% annual inflation rate.
In October, Fitch Ratings projected that Bulgaria’s HICP inflation would reach 3% in 2024 and go up to 3.5% in 2025 and 3.1% in 2026. The European Commission has forecasted that HICP inflation will slow down to 2.3% in 2025 from an estimated 2.5% in 2024.
“In 2025, inflation is set to abate to 2.3%, benefiting from negative energy inflation and low industrial goods inflation, as well as from base effects from the price hikes in tourist services in 2024. Headline inflation in 2026 is expected to edge up, driven by services inflation,” the EC said.
The IMF has a more optimistic forecast that Bulgaria’s inflation will fall to 2.6% in 2025 from an estimated 2.8% in 2024.
Bulgaria’s central bank expects that the inflation in 2024, 2025 and 2026 will be around 2.5%. On the other hand, the Organisation for Economic Co-operation and Development (OECD) expects 2.4% inflation for 2024, which should speed up to 2.7% in 2025 before easing to 2.5% in 2026.
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