Wires

UPDATE 1-Bulgaria inflation jumps to 4.9 pct y/y in Sept

Share

(Adds detail, background)

SOFIA, Oct 12 (Reuters) - Bulgaria's annual inflation jumpedto 4.9 percent on the year in September, from August's 3.9percent, driven by a spike in food, energy and transport costs,statistics office data showed on Friday.

Analysts expect annual inflation to fall to around 3.5percent by the end of the year, while the centre-rightgovernment has a much lower forecast for the end of the year of2.8 percent.

Rising transport costs following a 13 percent hike in powerprices and high global fuel costs, coupled with rising foodprices after a weaker grain crop fuelled monthly inflation of1.1 percent in September.

Bulgaria runs a pegged currency system which means its maintool for steering the economy is fiscal policy rather thaninterest rates, but inflation could turn into a headache for agovernment struggling to get consumers spending again.

Under the EU-harmonised inflation index, consumer pricesincreased 0.3 percent on the month in July and 3.4 percent froma year ago.

Services, where the costs of electricity and cost oftransport are included, jumped 5.0 percent on the month and 5.7percent on the year in September.

Food prices increased by 4.3 percent on the month inSeptember, due to a rise in the costs of pork, poultry andsausages, after a weak maize harvest. Maize is a key ingredientin animal feeds.

Non-food prices rose 2.0 percent in September, mainly due toa rise in costs of petrol fuels.

The government expects the economy to expand by up to 1.2percent this year compared to 1.7 percent in 2011, but theEuropean Commission and International Monetary Fund are moredownbeat - putting growth at 0.5 percent and 1 percentrespectively.

(Reporting by Tsvetelia Tsolova; editing by Patrick Graham)

((tsvetelia.tsolova@thomsonreuters.com)(+359-2-9399-731)(Reuter

Messaging: tsvetelia.tsolova.thomsonreuters.com@reuters.net))

Keywords: BULGARIA INFLATION/