There is growing distrust among people, since statistical data, to put it mildly, do not correspond to what the average person sees in their pocket. He said this in the Radio FOCUS program "Bulgaria, Europe and the World in Focus" with host Tsonya Sabcheva Assoc. Prof. Grigor Sariyski.
"To get an idea of how the average Bulgarian feels - because it is often commented that inflation was a feeling, not an objective trend - I highly recommend looking at the structure of consumption of basic food products. For the moment we still only have data for the end of 2025, but they are sufficiently indicative", he added.
In his words, given that for 2025 "we had inflation of about 4% and an income rate that was double-digit, i.e. it was around 11-12%, there should be an increase in consumption. It is normal for a person who receives more money in real terms to spend more and accordingly consume more – "...but we don't see anything like that."
"For all major food categories, we see lower consumption at the end of 2025 than at the end of 2024. This is not consumption by a population whose incomes are actually increasing. And that's why I say that there are quite contradictory elements in the disclosure of inflation data, which should be given very serious attention," explained Sariyski.
According to him, the challenges facing the new government are quite a few, because by the end of March we had a record deficit for the last 8-9 years.
"If we take March alone, then we have to go back even further to see a comparable increase in the deficit. It is normal for it to increase given that expenses are growing ahead of schedule. For example, for the first three months, we have an increase in expenses of about 1.9 billion, while revenues increase by only 1.4 billion. With such dynamics, the only thing that can happen is that you owe more and more money, because deficit spending means that you have to borrow from somewhere to be able to cover expenses“, he said.
According to him, Bulgaria has gone through two such periods since the beginning of the century. One is the "Great Recession", followed by a long crisis from 2009-2010 to 2014-2015, and during the pandemic or shortly after it – from 2020.
"In practice, this period continues to the present", he adds.
"The unpleasant thing is that in conditions where you have relatively decent growth and there are no serious shocks, as was the case in 2024-2025, an option for consolidation could have been sought, but such measures were not taken. We are seeing the consequences right now – an outpacing increase in expenses and, of course, in indebtedness", commented Sariyski.
In his words, the most worrying thing is that we are increasing our indebtedness to external creditors.
"For the 12 months to January alone, there has been an increase in external debt by over a third on an annual basis – 35.8%, which is quite worrying. About 4 billion of the increase is due to the state government, about 11 billion and 200 million is roughly the increase in the Central Bank's debt, and the rest is with the smaller sectors,“ he noted.
According to Assoc. Prof. Sariyski, the big challenge at the moment is not to "miss the train“, because we still have the luxury of the automatic increase in state revenues.
"In a period in which you have inflation and a corresponding gradual growth of these basic reference indices – regardless of whether we are talking about the budget or financial institutions – there is an impulse of an anticipatory increase in revenues. Just imagine the revenues from value added tax at higher prices – you automatically receive higher revenues and this should facilitate consolidation. In practice, however, the opposite is true, because expenses are currently growing even faster than expected,“ he explained.
"If urgent restrictions on these expenses are not taken, the trend will continue, and the factors are not in our favor at all, because the wind could soon turn if inflation slows down and budget revenues slow down,“ added Assoc. Prof. Sariyski.