Bulgarian inflation: Economist identifies key drivers of price perception

Economist Yulian Voynov has addressed the discrepancy between official inflation figures and the public perception of rising costs in Bulgaria. While preliminary data shows inflation dropped from 5.4% in June to 4.4% in July—largely due to lower oil prices—Voynov notes that prices in specific sectors remain significantly higher than official statistics suggest.

Voynov identifies several underlying drivers of inflationary pressure that standard methodologies may overlook. He points to the large share of the shadow economy, which has heavily influenced the real estate market. Additionally, he highlights that the influx of unbanked cash (money ‘under the mattress’) added approximately 1.2% to the inflation index, while bank lending contributed another 1%.

He concludes that the common perception of price hikes, often attributed to ‘1:1 speculation’ or price rounding in the service sector, is actually the third most significant factor behind the broader economic pressures.