Analysis of Bulgarian income, consumption, and poverty data suggests a general rise in well-being rather than an increase in overall hardship. Real household income and purchasing power have increased over recent years, accompanying a shift in spending patterns away from basic necessities toward leisure, culture, and education. While persistent issues of inequality and poverty remain, they are becoming increasingly concentrated within specific vulnerable demographics.
According to Adrian Nikolov, a senior economist at the Institute for Market Economics (IME), social policy should therefore be calibrated to address the needs of these highest-risk communities. Data indicates steady growth in the real-income index over the last decade, despite fluctuations caused by inflation. Households can now afford nearly double the goods and services they could purchase ten years ago.
This growth has correlated with changes in spending; the proportion of expenditure on food and housing has decreased, while spending on education and culture has risen as a share of total household budgets. However, the rate of poverty remains a concern, with the percentage of people below the poverty line remaining over 21% in 2025. Despite this, the rising poverty line, which is increasing faster than annual inflation, suggests that the purchasing power for those near the threshold has improved.
IME analysis points to key determinants of poverty, including labor market integration, educational background, and the low social inclusion of the Roma community. The analyst recommends reforming the social assistance model to ensure welfare spending is highly targeted based on specific community needs, rather than implementing broad consumption supports
Topics: #poverty #purchasing #power
