Bulgaria’s inflation shock

Bulgarian Inflation hit record heights in December 2007…

Year-on-year inflation stood at 12,5% at the end of December, a record-high figure for the last seven years, the country's statistics board NSI announced on Monday.

The consumer prices index in Bulgaria rose by 1.1% in December, its growth slowed down by 0.5% in comparison with the previous month. Food prices once again led the charge, rising by 1.9% in December over the previous month. Prices in the services sector went up by 0.6%, while non-food prices rose by 0.4%, compared to November.

Changing targets

Cumulative inflation for the period January-December over the same period last year was 8.4%.The Socialist-led government initially targeted an inflation of 4.4% for the year, edging closer to meeting the requirements to adopt the euro by 2010.

Global fuel price increases, utility price hikes and the strong increase of food prices since July, caused by the drought that decimated last year's harvest, were the biggest factors blamed for the rising inflation.

Bulgaria's cabinet initially targeted an inflation of 4.4% for the year, edging closer to meeting the requirements to adopt the euro by 2010, but had to scrap its estimates repeatedly - its latest forecast was 10%.