Year-on-year inflation in Bulgaria recorded a decline for a third straight month in September, edging down to 11 per cent from 11.2 per cent at the end of August, preliminary data released by the National Statistical Institute (NSI) on October 13 2008 showed.

Monthly inflation in September was 1.1 per cent, pushed higher by a 1.9 per cent rise in food prices, the first increase after four months of deflation. Non-food prices were 1.1 per cent higher, while prices for services were unchanged.

The harmonised consumer price index (CPI), the figure calculated by the statistics board for comparison with inflation in the European Union, was 0.9 per cent up in September and 11.4 per cent year-on-year, compared with 0.1 per cent monthly deflation and 11.8 per cent year-on-year inflation recorded in August. The highest rise in the harmonised CPI was posted by education prices, which went up 10.5 per cent in September, NSI said.

The Cabinet targets reducing harmonised inflation figure to 4.5 per cent for the year, according to the macroeconomic framework used to draft the 2008 budget.

Bulgarian National Bank said in its quarterly review in July that it expected year-on-year inflation, which peaked at a ten-year high of 15.3 per cent in June, to go down in the second half of the year and reach eight per cent by end-2008. Accumulated inflation for the first nine months of the year was 7.4 per cent, according to NSI data.

The European Commission was less optimistic in its own forecast and expects end-year inflation to be 9.9 per cent. An analyst poll carried out by Industry Watch think-tank in Sofia in the summer, before the recent meltdown on global financial markets caused fears for economic slowdown and higher inflation, produced an average figure of 9.6 per cent.