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Monday, January 14, 2008

Inflation Bulgaria December 2007

Bulgarian inflation eased back ever so slightly in December, from a 12.6% annual rate in November to a 12.5% in December. According to the National Statistics Office today the slight downwrad movement was produced by falling prices for telecommunications and for an easing up in the rate of increase on food and transportations costs.

Nevertheless Bulgaria's rate is still the second-highest in the European Union after Latvia, and this is evidently producing an unsustainable situation. Consumer prices rose 1.1 percent in the month after a 1.6 percent increase in November.

Bulgaria and the Baltic nations of Latvia, Lithuania and Estonia are struggling to slow the EU's fastest inflation because their central banks' so-called currency board systems limit monetary policy options when it comes to stemming price growth.

Costs for phone calls and other telecommunication services fell 0.5 percent in the year, the statistics office said. In September, a 25 percent jump in food prices caused by bad weather and global grain and oil price increases pushed Bulgaria's inflation rate to 13.1 percent as measured on the Bulgarian major groups index, the highest in the 27-nation bloc.

Food prices, which account for 35 percent of the Bulgarian consumer- price basket, slowed to 1.6 percent in December after a 2.4 percent increase in November. Transportation costs, which include gasoline prices and make up 17 percent of the consumer-price basket, slowed to a 1.3 percent gain in December from 3.7 percent in November.

Bulgaria's harmonized inflation rate as measured by the EU rose to 11.6 percent in December from 11.4 percent in November. Prices climbed 1.1 percent in the month, compared with 1.8 percent in November, the statistics office said.

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