High inflation in Bulgaria would hinder an increase in pensions by the planned 10 per cent in 2007, deputy parliamentary budget commission chair Martin Dimitrov said.

Pensions would increase by seven per cent instead, he said, as quoted by Focus news agency.

The salary increase at state-owned companies was not so big when comparing it with inflation, he said. Without fast economic development in the country, no compensation could be reached for the huge price hikes in recent months, Dimitrov said.

Prices in Bulgaria are 30 per cent lower as compared with EU countries and that is why the current pricing situation should be changed.

After Bulgaria entered the EU, many food product prices went up, resulting from higher prices in EU countries.

The main task of the Government was to take certain measures to boost incomes, according to Dimitrov. The real average salary growth in past two years was four per cent in 2005 and two per cent in 2006, which was too slow, Dimitrov said.

The tax burden was too high, which also affected prices.