Data analyzing income, consumption, and poverty in Bulgaria indicate a recent rise in general well-being rather than an increase in poverty levels. According to an analysis by Adrian Nikolov of the Institute for Market Economics (IME), real household incomes and purchasing power have risen, accompanied by a discernible shift in spending patterns away from basic necessities toward leisure, culture, and education. While inequality and pockets of poverty remain evident, they are increasingly concentrated within specific vulnerable demographic groups.
Nikolov suggests that social policy adjustments should therefore target these highest-risk communities. Over the past decade, Bulgaria’s real-income index has shown steady growth, despite a sharp slowdown caused by high inflation in 2022. Furthermore, despite recent inflation, households can now afford nearly double the goods and services they could purchase a decade ago.
Analysis of spending reveals that while the share of expenditure on food has decreased, the proportion allocated to leisure and education has increased. However, the rate of the poverty line’s increase has outpaced annual inflation, suggesting that the real purchasing power of those near the threshold has improved. Despite these positive indicators, the percentage of people below the poverty line remains high.
The IME analyst notes that poverty dynamics are largely determined by labor market integration, educational background, and social inclusion, which contribute to persistent inequality. Consequently, the recommendation is to reform social assistance models to ensure welfare spending is precisely targeted to individual community needs, rather than implementing broad consumption
Topics: #poverty #purchasing #power
