BTA: Services Sector Has Been Main Driver of Price Pressures in Bulgaria, NSI Deputy Head Says

The strongest pressure on prices in Bulgaria over the past two to two-and-a-half years has come from the services sector, Svilen Kolev, deputy head of the National Statistical Institute (NSI), told Nova TV on Sunday. He said prices for hotels, restaurants and accommodation had risen by between 20% and 30% over the past two years. According to Kolev, the reasons include stronger demand, the post-pandemic recovery and changes to VAT rates.

Kolev said that various forecasts suggest there may be conditions for stronger price increases by the end of the year. Among the factors behind this trend, he highlighted higher electricity, hot water and district heating prices; rising fuel costs due to the international situation and the conflict in the Middle East; as well as the planned increase in vignette prices from August 1 and changes to the excise duty schedule for tobacco products.

Hairdressing services, personal care, home and car repairs and maintenance, as well as education and driving courses, have recorded an average annual increase of around 20%, Kolev said. He attributed the trend to higher wage costs, rents and electricity prices.

The NSI deputy head said the transport sector recorded a monthly decline of 3.3% in June due to lower fuel prices. He added, however, that despite this decline, the prices of major fuels remain 15% to 20% higher than during the same period in 2025.

Food prices recorded a slight monthly decline of around 2% to 2.2% in June in the so-called small consumer basket. According to Kolev, the decline was seasonal and was mainly driven by fresh fruit and vegetables – tomatoes, cucumbers and zucchini, which were 25% to 30% cheaper than during the winter months.

The NSI deputy head recalled that monthly deflation of 0.9% was recorded in June, while annual inflation slowed to 5.4%, down from levels close to 7% in the previous month. According to Kolev, the pace of price growth has slowed, but July trends are expected to show that prices will continue to rise, albeit at a slower rate.

Kolev said that average wages increased by nearly 13% year-on-year in the first quarter of 2026, adding that this was more than enough to offset the accumulated inflation over the past three years, which was also around 13%. The NSI deputy head said the discrepancy between statistical data and people's perception of prices is due to the fact that the prices of certain goods change on a monthly basis, while incomes tend to rise more slowly.