Bulgaria’s unexpected slash in state-regulated hospital fees has drawn scrutiny over whether the government is massaging inflation figures to meet eurozone entry criteria, just weeks before a crucial EU decision.
In April, Sofia announced an abrupt 82.8% reduction in daily hospital stay fees — from 5.8 leva (€2.97) to 1 lev — a move that puzzled even state TV anchors, who admitted the rationale was unclear. The cut helped bring Bulgaria’s harmonized index of consumer prices (HICP) to 2.7% — just under the 2.8% threshold needed to qualify for euro adoption on Jan. 1, 2026.
While officials say the healthcare fee reduction was unrelated to the euro convergence process, economists and European officials have pointed to the sharp fall in state-controlled prices — including transport and postal services — as decisive in pushing down headline inflation.
“The only reason Bulgaria has qualified is, if you look at the inflation data, due to state-administered prices,” a former Bulgarian government official familiar with the figures told POLITICO. “It is well known that statistical data was adjusted to show results more favorable than reality — especially in sectors like postal services, transport and healthcare.”
According to the European Commission’s convergence report, the April drop in hospital fees alone lowered annual services inflation by 2.9 percentage points. Economists estimate it shaved 0.89 percentage points off the overall 12-month inflation figure.
Rail fares were also cut by over 9%, and postal charges saw similar reductions — contributing to a 1.2 percentage point month-on-month decline in HICP in April.
Steve Hanke, a professor at Johns Hopkins University who helped design Bulgaria’s currency board in the 1990s, warned that the inflation data may not reflect economic reality. “I think there’s a high probability that [the inflation data] has been manipulated,” Hanke said in emailed remarks. “Given my experience … I would not trust inflation data that have been thrown up as far as I could throw them.”
Bulgaria’s bid to join the eurozone has long been supported by its tight fiscal policies and a currency pegged to the euro. But inflation has remained a stumbling block, exacerbated by global price shocks and internal cost pressures.
The Bulgarian government insists the cut in hospital fees was driven by social policy goals, aiming to reduce out-of-pocket spending for households. In a statement to POLITICO, the health ministry said the initiative aligned with EU Council recommendations to reduce financial barriers to healthcare.
Yet critics question the timing and impact. Medical associations have urged the government to reverse the decision, warning that while the fee was symbolic, it remains a vital revenue source for hospitals, especially in rural areas. One major hospital in Sofia, St. Ekaterina, reportedly expects to lose around 40,000 leva (€20,450) annually due to the change.
The health system already relies heavily on direct payments from patients. According to the OECD, out-of-pocket costs account for 34% of total health spending in Bulgaria — more than double the EU average of 15%.
The finance ministry has rejected accusations that the pricing changes were motivated by euro adoption goals, calling suggestions of data manipulation “disinformation and rumors.” The National Statistical Institute also denied any political influence, saying it only provides raw data.
Former deputy prime minister Atanas Pekanov noted that state-regulated prices are common across the EU and argued that Bulgaria may have qualified for eurozone entry sooner if inflation in other countries hadn’t been suppressed by emergency measures. “These are not prices that were market-based and suddenly became regulated — they’ve always been state-administered,” he said.
Hanke, however, remains skeptical. He said Bulgaria’s money supply has been growing at over 6.3% annually — well above what his model considers optimal for price stability. “It looks like Bulgaria’s inflation data have been doctored to look somewhat better (read: lower) than true inflation measures would indicate,” he added.
The final decision on Bulgaria’s accession, including the euro conversion rate, is expected to be taken by the EU Council on July 8.