Bulgaria Experiences Deflation for Third Consecutive Month

In June, Bulgaria's annual inflation rate rose to 2.5%, up from 2.3% in May, as reported by the National Statistical Institute. However, the month of June itself experienced a deflation of 0.2%, consistent with the previous month's change.

For June, there was minimal price growth noted in health services and the entertainment and culture sectors, while restaurant services and accommodations saw increases exceeding two percent.

Despite these increases, most categories of goods and services experienced price declines, including food, communications, transport, and clothing and footwear.

Year-to-date inflation, comparing June 2024 to December 2023, is at 0.2%, while the average annual inflation rate from July 2023 to June 2024 is 4.6%, down five-tenths from last month's figure of 5.1%. This rate was also noted in reports by the European Commission and the European Central Bank regarding the country's readiness to join the Eurozone.

In June 2024, the largest price drops were seen in "Messages" (down 1.5%), "Clothing and Shoes" (down 1.2%), "Transport" (down 0.9%), and "Food Products and Soft Drinks" (down 0.5%). Conversely, the most significant price increases were recorded in "Restaurants and Hotels" (up 2.2%), "Miscellaneous Goods and Services" (up 0.4%), "Entertainment and Culture" (up 0.3%), and "Healthcare" (up 0.2%).

Prices in several categories, including "Home Furnishings," "Education," "Housing, Water, Electricity, Gas, and Other Fuels," and "Alcoholic Beverages and Tobacco Products," remained unchanged.

According to the Harmonized Index of Consumer Prices (HICP), monthly inflation in June 2024 was 0.2%, with annual inflation at 2.8%. Year-to-date inflation stands at 0.7%, while the average annual inflation for July 2023 to June 2024 is 4.7%.

Measured by the price index of the small basket (PISB), inflation decreased by 0.3% in June 2024 compared to the previous month but increased by 0.1% since the start of the year. For the lowest 20% of households, prices for goods and services in the small basket showed a decrease of 0.4% for food products, a 0.3% drop for non-food goods, and a 0.1% rise in services.

For May, the National Statistical Institute (NSI) reported that Bulgaria experienced deflation for the second consecutive month, with retail prices dropping by 0.2 percent after a 0.3 percent decline in April.

This marked the first occurrence of two consecutive months of deflation since 2020. Annual inflation fell by 0.1 percentage points to 2.3 percent in May compared to April's 2.4 percent, while year-to-date inflation stands at 0.4 percent.

The harmonized index of consumer prices, relevant for EU comparisons, remained unchanged in May after a 0.1 percent drop in April, reflecting a 0.2 percentage point rise from April’s 2.5 percent, marking the first increase since July of the previous year.