Bulgaria: Consumers are Cutting Back on Food Purchases

With double-digit inflation in Bulgaria, household spending is expected to outpace income in the second quarter of the year. According to the data of the National Statistical Institute, in the period April - June, the total income of a household member is BGN 2,207, which is an increase of 16.5% compared to the same quarter of 2021.

The total expenditure per person is BGN 1,962 and increases by 17.8% compared to a year earlier.

According to the data, the consumption of most basic food products on average per person from a household decreased, with the most noticeable decrease in bread and pasta - from 19.6 to 18.9 kg, vegetables - from 20.3 to 19.4 kg and fruit - from 10.3 to 9.7 the kilogram.

The consumption of meat products, cheese, eggs and sugar remains unchanged.

The trend of reduced consumption of bread and pasta products has been observed in the last decade, but nevertheless, one of the anti-crisis measures of the "Petkov" cabinet included a reduction to 0 of VAT on bread, which came into effect at the beginning of July.

In the structure of the total expenditure, the largest relative share remains the expenditure on food and soft drinks (31.2%), followed by those on housing (17.3%), taxes and social security (12.8%) and transport and communications (12.3%).

Compared to the second quarter of 2021, the relative shares of expenditures on food and non-alcoholic beverages, housing, and health care increased by 0.4 percentage points each, and those on transportation and communications - by 0.9 percentage points.

The share of spending on alcoholic beverages and cigarettes and on clothing and footwear decreased by 0.2 percentage points each.

In absolute terms, in the second quarter of 2022 compared to the same quarter in 2021, on average per person in a household, spending by type changed as follows:

• Expenditures for food and soft drinks increased from BGN 513 to BGN 612 (by 19.3%).
• Expenditures for alcoholic beverages and cigarettes increased from BGN 70 to BGN 78 (by 11.6%).
• Expenditures for clothing and shoes increased from BGN 61 to BGN 68 (by 11.4%).
• Housing costs (water, electricity, heating, furnishing and home maintenance) increased from BGN 283 to BGN 339 (by 20.0%).
• Health care costs increased from BGN 100 to BGN 125 (by 25.8%).
• Transport and communication costs increased from BGN 190 to BGN 242 (by 27.0%).
• Spending on leisure, cultural recreation and education increased from BGN 62 to BGN 72 (by 16.0%).
• Expenditures for taxes and social security increased from BGN 236 to BGN 251 (by 6.4%).

In the structure of the total income, the highest relative share remains income from salary (54.1%), followed by income from pensions (34.4%) and from self-employment (4.3%). Compared to the second quarter of 2021, the relative share of income from wages decreased by 4.4 percentage points, and income from self-employment - by 0.7 percentage points. The share of income from pensions increased by 5.5 percentage points. The latter can be explained by their increase several times in the last year.

In nominal terms, average income per household member by source of income changes as follows:

• Salary income increased from BGN 1,108 to BGN 1,193 (by 7.7%).
• Income from self-employment increased from BGN 94 to BGN 96 (by 1.7%).
• Income from pensions increased from BGN 547 to BGN 760 (by 39.1%).
• Income from social benefits and benefits increased from BGN 45 to BGN 48 (by 5.2%).

In the second quarter of 2022, the relative share of cash income of households in total income was 99.5%, and the share of income in kind - 0.5%.

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