Over the past five years, Bulgarian households have seen their savings lose more than 40 percent of their real value as inflation steadily eroded purchasing power, according to official data from the National Statistical Institute (NSI). An analysis by European investment platform Freedom24 highlights that, while real estate prices in Bulgaria have risen sharply, returns from global capital markets have been significantly higher and achieved with better liquidity and lower costs.

Data from the NSI show that accumulated inflation between August 2020 and August 2025 exceeds 40 percent, meaning that BGN 100,000 saved in 2020 now has the purchasing power of just BGN 60,000. The head of the NSI, Associate Professor Atanas Atanasov, confirmed that for the five-year period from September 2020 to September 2025, total inflation surpassed 41 percent.

The real estate market, meanwhile, has experienced a strong boom. The National Home Price Index rose from 128.1 in early 2020 to 224.5 in early 2025 - an increase of about 75 percent, or an average annual rise of nearly 12 percent. In Sofia, prices per square meter now range from 1,800 to 2,200 euros, with some neighborhoods seeing up to 16 percent annual growth. Despite this, rental yields remain modest - around 4.2 to 4.5 percent gross, or 2.5 to 3.5 percent net after taxes and maintenance costs. Transaction fees of up to 10 percent and limited liquidity further reduce the profitability of real estate investments.

By contrast, global stock markets have far outperformed domestic property returns. Between 2020 and 2025, the MSCI World Index rose by roughly 170 percent and the S&P 500 by about 208 percent. A 100,000-euro investment in 2020 would now be worth approximately 175,000 euros in Bulgarian property, 270,000 euros through the MSCI World, or 308,000 euros via the S&P 500. In an environment of over 40 percent inflation, only investments with consistent double-digit annual growth have managed to preserve or increase real wealth.

Inflation in Bulgaria for the first eight months of 2025 stands at 4.2 percent, while global market indices such as the iShares MSCI World ETF and the S&P 500 ETF have delivered returns of 10 to 11 percent, translating to a 6?7 percent real gain after adjusting for inflation. The average interest rate on bank deposits remains just 0.7 percent, leaving savers with a real loss of around 3.5 percent in purchasing power each year.

Financial experts recommend a diversified investment strategy, with 60 percent allocated to global ETFs and 40 percent to bonds or deposits. Such a portfolio, they note, can generate around 5 percent real growth with moderate risk. This balance between diversification, regular portfolio rebalancing, and a long-term focus has proven effective even during market turbulence - short-term declines, such as those in technology stocks earlier this year, were offset within two months.

Real estate continues to hold emotional and practical appeal for many Bulgarian families, offering stability in uncertain times. However, analysts warn that its low liquidity and limited real returns make it less effective as a hedge against inflation. Global exchange-traded funds, by contrast, offer broad diversification, easy access to thousands of companies worldwide, and stronger long-term capital growth.

Financial strategists argue that the most sustainable approach is a balanced one - real estate for stability and global investments for growth and inflation protection. As Bulgaria moves closer to Eurozone membership in 2026, the issues of international diversification and financial literacy are gaining importance for those seeking to preserve and grow their wealth.