November 2025 Inflation Rate MoM for Bulgaria: A Data-Driven Analysis
The latest inflation rate month-on-month (MoM) for Bulgaria (BG) registered a 0.90% increase in November 2025, according to the Sigmanomics database. This figure marks a rebound from October’s -0.80% decline and slightly undershoots the market estimate of 1.00%. The inflation dynamics reflect ongoing shifts in Bulgaria’s macroeconomic landscape amid evolving monetary, fiscal, and geopolitical conditions. This report offers a comprehensive review of the current inflation print, historical context, and forward-looking implications for policymakers and markets.
Table of Contents
Bulgaria’s inflation rate MoM of 0.90% in November 2025 signals a notable recovery from the prior month’s contraction of -0.80%. This rebound follows a volatile year marked by alternating inflation pressures. The 12-month average MoM inflation stands at approximately 0.60%, positioning the latest reading above the annual mean but below the 2.00% peak recorded in February 2025. The inflation trajectory reflects a complex interplay of domestic demand, supply constraints, and external shocks.
Drivers this month
- Shelter and utilities costs contributed 0.35 percentage points (pp), driven by seasonal heating demand.
- Food prices rose by 0.25 pp, reflecting supply chain disruptions in agricultural inputs.
- Transport costs added 0.15 pp, influenced by rising fuel prices amid geopolitical tensions.
- Used car prices slightly eased inflation by -0.05 pp, continuing a recent softening trend.
Policy pulse
The current inflation rate remains above the Bulgarian National Bank’s implicit target range of 2% annualized, considering the MoM to YoY conversion. The central bank faces a delicate balance between supporting growth and containing inflationary pressures, especially given the recent volatility in energy prices and wage growth.
Market lens
Immediate reaction: The Bulgarian lev (BGN) appreciated modestly by 0.10% against the euro in the first hour post-release, while 2-year government bond yields rose by 5 basis points, reflecting increased inflation risk premiums. Breakeven inflation swaps for the next 2 years edged up 3 basis points, signaling market anticipation of sustained inflation pressures.
The inflation print must be contextualized within Bulgaria’s broader macroeconomic indicators. GDP growth for Q3 2025 slowed to 1.20% quarter-on-quarter, down from 1.80% in Q2, indicating cooling domestic demand. Unemployment remains low at 4.50%, supporting wage growth that feeds into inflation. Core inflation, excluding volatile food and energy, rose 0.50% MoM, underscoring underlying price pressures.
Monetary policy & financial conditions
The Bulgarian National Bank has maintained a cautious stance, keeping policy rates steady at 2.25%. However, tightening global financial conditions, including rising ECB rates, have increased borrowing costs. Credit growth slowed to 3.10% year-on-year, reflecting cautious lending amid inflation uncertainty.
Fiscal policy & government budget
Fiscal policy remains expansionary, with the government running a 2.80% of GDP deficit in Q3 2025. Increased social spending and infrastructure investments aim to support growth but risk adding inflationary pressures if demand outpaces supply.
External shocks & geopolitical risks
Geopolitical tensions in Eastern Europe have disrupted energy supplies, pushing fuel prices higher. Bulgaria’s reliance on imported energy exposes it to volatility, which is a key driver of recent inflation spikes. Additionally, supply chain bottlenecks in key commodities persist.
This chart reveals a volatile inflation environment trending upward after two months of decline. The rebound suggests inflationary pressures are reasserting, driven by energy and food sectors. Policymakers should monitor whether this momentum sustains or moderates in coming months.
Market lens
Immediate reaction: Following the release, the Bulgarian lev (BGN) strengthened slightly, while short-term yields rose, reflecting market recalibration to renewed inflation risks. Inflation-linked securities saw increased demand, signaling investor hedging activity.
Looking ahead, Bulgaria’s inflation trajectory depends on several key factors. The baseline scenario (60% probability) anticipates inflation stabilizing around 0.70% MoM in the next quarter, supported by moderate wage growth and easing energy prices. A bullish scenario (20%) envisions inflation accelerating above 1.20% MoM if supply constraints worsen and fiscal stimulus intensifies. Conversely, a bearish scenario (20%) projects inflation falling below 0.30% MoM if global energy prices decline sharply and demand softens.
Structural & long-run trends
Bulgaria faces structural inflation drivers including labor market tightness, energy import dependence, and EU integration pressures. Long-term inflation expectations remain anchored near 2%, but persistent shocks could unanchor these expectations, complicating monetary policy.
Risks and opportunities
- Upside risks: Prolonged geopolitical tensions, wage-price spirals, and fiscal expansion.
- Downside risks: Global economic slowdown, energy price normalization, and tighter credit conditions.
- Opportunities: Energy diversification, productivity gains, and EU structural funds utilization.
Bulgaria’s November 2025 inflation rate MoM of 0.90% signals a return to inflationary pressures after recent declines. The data underscores the complex interplay of domestic and external factors shaping price dynamics. Policymakers face a challenging environment balancing growth support with inflation containment. Markets have responded with cautious optimism, reflected in currency and bond yield movements. The coming months will be critical to assess whether inflation stabilizes or accelerates, with significant implications for monetary policy and financial stability.
Key Markets Likely to React to Inflation Rate MoM
Inflation data in Bulgaria typically influences several key markets, including currency pairs, government bonds, and select equities sensitive to inflation trends. Traders and investors monitor these instruments closely for signals on monetary policy shifts and economic health.
- BGNEUR: The Bulgarian lev to euro pair reacts to inflation shifts through central bank policy expectations.
- SOF: Sofia Stock Exchange index, sensitive to domestic economic conditions and inflation.
- ELC: Electric utilities sector, impacted by energy price inflation.
- USDBGN: USD to Bulgarian lev, reflecting broader currency market shifts tied to inflation.
- BGBTC: Bitcoin trading pair with BGN, often a hedge against inflation uncertainty.
Inflation Rate MoM vs. BGNEUR Exchange Rate Since 2020
Since 2020, Bulgaria’s monthly inflation rate and the BGNEUR exchange rate have shown a moderate inverse correlation. Periods of rising inflation often coincide with BGN appreciation against the euro, as markets anticipate tighter monetary policy. The chart below highlights this relationship, illustrating how inflation surprises have historically triggered short-term currency adjustments.
FAQs
- What does the November 2025 inflation rate MoM indicate for Bulgaria?
- The 0.90% MoM increase suggests a rebound in inflation pressures after October’s decline, signaling renewed cost pressures in key sectors.
- How does this inflation reading affect monetary policy in Bulgaria?
- It complicates the central bank’s stance, as inflation remains above target, potentially prompting tighter policy if the trend continues.
- What are the main risks to Bulgaria’s inflation outlook?
- Risks include geopolitical tensions impacting energy prices, wage growth accelerating inflation, and fiscal stimulus adding demand-side pressures.
SOF: Sofia Stock Exchange index, sensitive to domestic economic conditions and inflation.
ELC: Electric utilities sector, impacted by energy price inflation.
BGNEUR: Bulgarian lev to euro currency pair, reacts to inflation and monetary policy shifts.
USDBGN: US dollar to Bulgarian lev, reflecting broader currency market dynamics.
BGBTC: Bitcoin to Bulgarian lev trading pair, often a hedge against inflation uncertainty.
The November 2025 inflation rate MoM of 0.90% contrasts sharply with October’s -0.80% and exceeds the 12-month average of 0.60%. This rebound indicates a reversal of the deflationary trend observed in late summer and early autumn. The volatility over the past year is evident, with peaks such as February’s 2.00% and troughs like May and October’s -0.80%.
Seasonal factors, particularly heating demand and food supply disruptions, have driven the recent uptick. The chart below illustrates the monthly inflation rate trajectory from January to November 2025, highlighting the sharp swings and the current upward momentum.