Bulgaria Inflation Down to 0,5% y/y in Jan

Bulgaria's inflation rate on an annual basis has gone down from two-digit levels to nearly a zero. Photo by BGNES

The consumer price index (CPI) in Bulgaria slowed to 0,5 % year-on-year in January after marking a 0,6 increase the previous month, statistics office data showed on Monday.

On a monthly basis, the CPI edged up by 0,7% after a 0,5% increase in December last year.

Food prices in January slightly increased by 0,9% on a monthly basis. Among services the highest increase was marked by the prices of touristic (1,7%) and transport (1,5%) services.

Meanwhile, the harmonized index of consumer prices rose 1,8% on a yearly basis in January and was up 0.6% on a monthly basis.

Bulgaria's inflation rate has registered a drop on a monthly basis over the last months of 2009 and has gone down from two-digit levels to nearly a zero on an annual basis.

The drop in inflation is good news for Bulgaria as its high levels have been one of the key obstacles for the adoption of the European single currency. The country currently operates in currency board regime and the lev is pegged to the euro.

Bulgaria, the European Union’s poorest country, is currently going through its first recession in 12 years after a three-year lending boom stalled and foreign investment dried up.

The new government has approved an austerity budget for 2010 and will target a zero gap in a bid to speed up euro zone entry and beat recession.

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