Bulgaria remains the European Union’s lowest-price economy, although the gap with the bloc’s average level has continued to narrow in recent years, according to an analysis by the Institute for Market Economics (IME) published on June 26.

The Sofia-based think tank said Bulgaria’s price convergence with the EU average has accelerated since the pandemic, driven by stronger economic growth, rising household incomes and elevated inflation in newer member states following the war in Ukraine.

“The price convergence has accelerated significantly after the pandemic and especially during the period of high inflation after the start of the war in Ukraine,” IME senior economist Adrian Nikolov wrote in an article.

IME data, based on a price level index, shows Bulgaria’s overall price level reached about 63% of the EU average in 2025, compared with 65% in neighbouring Romania.

The analysis noted that the EU average sits between Italy and France, with most western European economies above the mean, while Bulgaria and Romania remain among the bloc’s cheapest members.

Between 2022 and 2025, Bulgaria’s convergence with EU price levels accelerated by around five percentage points. In the decade before the COVID-19 pandemic, the country’s price level ranged between 49% and 53% of the EU average, rising above 55% in 2021 and approaching 60% in 2023.

Significant sectoral differences persist. Housing, utilities and public services in Bulgaria are priced at about 41% of the EU average, while healthcare stands at around 46%.

By contrast, food and non-alcoholic beverages are close to the EU average at about 93%, and communications are slightly above it at around 101%.

Within food categories, prices vary sharply: meat is about 72% of the EU average, cereals and bread 81%, and vegetables 83%, while butter and fats stand at 142%, dairy at 126% and sugar confectionery at 116%.

The IME said the dispersion highlights differences in productivity, efficiency and competition within the food sector.

Across the EU, price levels have been gradually converging since the post-pandemic inflation surge eased, as higher-cost economies move closer to the average while lower-cost members continue to rise toward it.

Bulgaria and Romania have recorded the highest inflation rates in the EU so far in 2026, suggesting further convergence toward EU price levels.