Not Getting Poorer Generally as Their Purchasing Power Grows by 80% in 10 Years, Thing-Tank Says

Analysis of Bulgarian income, consumption, and poverty data suggests a general rise in well-being rather than an increase in overall deprivation. Real income and purchasing power for households have risen significantly, with the real-income index increasing by over 80% in the last decade. This growth has been accompanied by a notable shift in spending patterns, moving expenditure away from basic necessities toward leisure, culture, and education.

Despite this improvement, the existence of poverty and inequality remains evident, though these issues are becoming more concentrated within specific vulnerable populations. According to Adrian Nikolov, senior economist at the Institute for Market Economics (IME), social policy adjustments should therefore focus on the highest-risk communities. The data indicates that while households can now afford nearly double the goods and services they could ten years ago, the share of spending on food and housing has decreased relative to total expenditure.

Conversely, spending on leisure and education has risen as a percentage of household budgets. However, the picture is tempered by persistent poverty metrics. The percentage of people below the poverty line remained above 21% in 2025.

Nikolov notes that while the absolute number of poor individuals is declining due to population reduction, the poverty line itself is rising faster than annual inflation, suggesting that the purchasing power of those near the threshold is improving. The analyst advises that future social policy should avoid broad interventions, such as universal consumption support, to prevent inflationary pressure. Instead, reforms must target the social assistance model, ensuring that welfare spending is highly focused on the specific needs of the most vulnerable groups, which are primarily defined by labor market integration, educational background, and social inclusion.

Topics: #poverty #purchasing #power