it will be efflorescence.
In a habitable room, you may want to put more money and effort into damp-proofing the wall, than if it was just a cellar. You could start by scraping off the mineral crystals (don't wet them) and the bubbling paint, and try to ventilate that area, e.g. by not putting furniture against it.
If there is wooden floor, joists or skirting, it will be liable to rot. You can probably pry off skirting reasonably easily. Look for any signs of overspilling gutters, leaking pipes, defective drains that will make it worse. If it is a wooden floor, look for airbricks and clear out the dust and cobwebs or other obstructions . You need maximum possible ventilation of the subfloor.
Get a pencil and draw round the outline of the damp, and pencil the date against it. Then you will see if it gets bigger or smaller (e.g. after rain).
If you feel impelled to paint it, you can use Dulux Trade Supermatt Emulsion which is breathable (it is not very durable or washable, as it is non-vinyl. AFAIK the smallest tub is 5litres. PBW is cheapest.
If you have any opportunity to work outside, e.g. sloping any paving so that rain runs away from the house, or lowering the ground level, that will help. I presume your house is rather old, or has been amateurishly altered.