Bulgaria’s inflation will sufficiently decrease in 2007 according to report of The Economist Intelligence Unit (EIU).

In 2006, Bulgaria registered inflation of 7.3 per cent. It went down to 6.5 per cent in the end of the same year, Dnevnik daily reported.

Sharp increase of alcohol and cigarettes excise in the beginning of 2006 and the lack of future duty taxes will be the main factors to stimulate inflation decrease, the report said.

Data of National Statistical Institute (NSI) showed that the country’s inflation decreased to a monthly minimum of 4.1 per cent on annual basis for March.

Labour market shrinkage and increasing salaries will cause inflation pressure and this will be the main reason for comparatively high levels of inflation in the next two years.

High inflation will hinder Bulgaria’s integration within the euro zone at least until 2010, EIU said.

High inflation and the strong euro will result in more expensive lev in the coming two years but there is no serious threat to the Bulgarian currency in a short-term period.

The report also said that Bulgaria failed to achieve the prognosis for decreasing its current account deficit in the beginning of 2007.