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

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

Analysts expect annual inflation to fall to around 3.5 percent by the end of the year, while the centre-right government has a much lower forecast for the end of the year of 2.8 percent.

Rising transport costs following a 13 percent hike in power prices and high global fuel costs, coupled with rising food prices after a weaker grain crop fuelled monthly inflation of 1.1 percent in September.

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

Under the EU-harmonised inflation index, consumer prices increased 0.3 percent on the month in July and 3.4 percent from a year ago.

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

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

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

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

(Reporting by Tsvetelia Tsolova; editing by Patrick Graham)

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Keywords: BULGARIA INFLATION/