Investor Presentaiton
Inflation developments
Accelerated inflation rate driven by external factors, including increased energy prices
Following almost four years of deflation, the growth rate of consumer
prices turned positive in 2017 and increased slightly until 2019. Due to
the COVID-19 pandemic, the annual HICP inflation rate decreased to 1.2%
at the end of 2020'.
In the beginning of 2021 the annual inflation rate in Bulgaria started to
accelerate, with the annual average HICP inflation reaching 2.8%. The
surge in international commodity prices was the main pro-inflationary
factor. Energy contributed the most, followed by food and non-alcoholic
beverages.
The Russian-Ukrainian military conflict from February 2022 led to
increased prices of energy recourses and annual inflation reached
13.0%. In 2022, the Government introduced a package of measures in
support of businesses and social aid, with a priority on energy, food and
household income.
Inflation started to ease in Q4 2022 and kept on decelerating in 2023 due
to decreasing international commodity prices and favourable base
effects. Headline HICP inflation is projected to stand at 6.9% by the end of
2023 and decelerate to 3.3% at the end of 2024 due to the projected
decline in international commodity prices. Core inflation will be more
persistent due to strong private consumption and tight labour market
conditions, but is also expected to slow down in the medium term.
HICP Inflation (% change year on year, end of period)
5.8
6.4
3.6
4.3 4.9
1.8
2017
10.6
26.8
21.6
19
10.4
8.2
الاب.
3.2
1.4
2.3 2.7
2
2.5
-6.1
2018
2019
2020
2021
2022
Sep-23
Food and non-alcoholic beverages
Non-energy industrial goods
Services
Alcoholic beverages, tobacco
Energy
All items HICP
Source: Eurostat
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