Year-on-year inflation in Bulgaria rose to a new 10-year high of 15 per cent in May, according to the preliminary data released by the National Statistical Institute (NSI) on June 12 2008.

Monthly inflation in May was 0.5 per cent, the lowest value this year, down from 0.9 per cent in April.

Food prices, which have been the main driver of inflation over the past 12 months, posted a 0.3 per cent decrease in May. Non-food goods were 1.5 per cent higher and services went up by 0.6 per cent.

Harmonised inflation, the figure calculated by the statistics board for comparison with inflation in the European Union, was 0.9 per cent in May and 13.9 per cent year-on-year, compared with 0.7 per cent for the month and 13.6 per cent year-on-year in April. The Cabinet targets reducing harmonised inflation figure to 4.5 per cent for the year.

Officials have blamed last year's drought and floods for the rising food prices, which grew by more than 20 per cent in 2007, causing inflation to overshoot the Government's original 4.4 per cent target for 2007. End-year inflation was 12.5 per cent.

High inflation is one of the main obstacles preventing Bulgaria from adopting the common European currency, the European Central Bank (ECB) said in May.