Supply Chain Price Transmission and the Role of Fundamental Factors: Evidence from Bulgaria in the Run-Up to Euro Area Accession
Supply Chain Price Transmission and the Role of Fundamental Factors: Evidence from Bulgaria in the Run-Up to Euro Area Accession

Summary/Abstract: The aim of this paper is to examine the price dynamics in the Bulgarian economy in the run-up to Euro Area accession within the framework of the supply chain, starting from the main production factors' prices, passing through producer and consumer prices, with a particular focus on the extent to which producer and consumer price dynamics can be explained by changes in the fundamental pricing factors. The analysis is based on a comprehensive author's data set of indicators for the prices of key production factors and a specifically designed Production Factor Price Index. The results show that in 2025 and early 2026, consumer price dynamics cannot, to any significant extent, be explained by the fundamental pricing factors of production. The final consumer prices are primarily formed by the interaction of domestic demand, market structure and consumer behaviour, while the role of traditional pricing factors is limited and strongly differentiated across the different sectors.

• Details
• Contents