Data concerning incomes, consumption, and poverty in Bulgaria suggest a recent rise in overall well-being rather than escalating hardship. Analysis indicates that real income and household purchasing power have increased, prompting a shift in spending from basic necessities toward leisure, culture, and education. While poverty and inequality persist, they are increasingly confined to specific vulnerable segments of the population.
According to Adrian Nikolov, a senior economist at the Institute for Market Economics (IME), social policy should therefore be tailored to address the needs of the highest-risk communities. Nikolov notes that Bulgaria’s real-income index has shown steady growth over the last decade, despite inflationary pressures. While the economy experienced a slowdown due to high inflation in 2022, projections show accelerated growth for 2024 and 2025.
This growth has correlated with notable changes in household spending. Spending shares on food and housing have decreased, while expenditures on culture and education have risen. Despite high food inflation, households can now afford significantly more goods and services than a decade ago.
However, the picture is tempered by persistent social challenges. The percentage of people under the poverty line remains above 21%. Although the absolute number of people in poverty has decreased due to population decline, the rising poverty line means that the purchasing power of those near the threshold has improved.
Inequality indicators are improving incrementally, though the country remains one of the EU’s most unequal. The author stresses that the main drivers of poverty remain linked to labor market integration, educational background, and social inclusion, particularly within the Roma community. The IME suggests that future social policy should reform assistance models to be highly targeted, rather than implementing broad interventions that could exacerbate inflation.
Topics: #poverty #purchasing #power
