Bulgaria and Serbia see June inflation slowdown and looming price pressures

In June Bulgaria posted a 0.9% month‑on‑month decline in its consumer price index, marking one of the deepest deflationary swings in recent years. The drop was driven mainly by cheaper fuel after a temporary cease‑fire in the Iran conflict and seasonal reductions in food prices. Transport costs fell 3.3% (diesel ‑9.4%, propane‑butane ‑14.1%, international flights ‑9.5%) while food and non‑alcoholic beverages were down 1.9%. Restaurant and hotel services rose 1.5%. For low‑income households the overall basket fell 1% and food prices slipped 2.2%.

Meanwhile, Serbia’s inflation eased to 2.7% year‑on‑year in June, with a modest 0.2% monthly increase. A bumper agricultural season and cheaper fruit lowered food prices, contributing to the slowdown. Economists caution that inflationary pressures could return later in the year due to geopolitical tensions in the Middle East, higher electricity costs, new excise taxes on cigarettes and train tickets, and increased waste‑collection fees, as well as anticipated “helicopter” cash injections that lack a production base.