Bulgaria Inflation Hits 6.1% as Banks Oppose Profit Tax

Bulgaria's annual inflation rose to 6.1% in October, the highest level since May. Preliminary data from the National Statistical Institute shows monthly consumer prices increased by 1.3%, reversing a 0.2% decline seen in September. The surge was driven primarily by transport costs, which jumped 37.1%, alongside increases in hotel and restaurant prices and educational services.

Speaking at an international banking forum in Sofia, Dimitar Radev, Governor of the Bulgarian National Bank, stated that inflationary pressure in Bulgaria remains stronger than the Eurozone average. Radev noted that while adopting the euro would mitigate external risks, it would not remove vulnerabilities stemming from domestic economic conditions such as lending dynamics and financing.

Simultaneously, the Association of Banks in Bulgaria challenged a proposed excess-profits tax. Chair Petya Dimitrova argued against the tax by highlighting that banks reinvested 70% of their profits generated between 2020 and 2025. Dimitrova further claimed that the banking system provides some of the lowest interest rates in Europe, which has supported broader economic development despite various upheavals.