Some increases in prices will be inevitable in Bulgaria after January 1 2007. This is expected mainly because of European Union requirements that will apply to all sectors of Bulgaria’s economy. This could make producers and traders increase prices to compensate for increased costs.

For many Bulgarians, price increases started several months ago. Because of an increase in wheat prices, flour prices increased by 34 per cent over the months of September-November, Sofia Stock Exchange data shows. The purchase rates of quality wheat currently range between 240 and 280 leva a ton, with traders offering the grain for 280-320 leva a ton. This has resulted in a rise in bread prices of more than 10 per cent. In many parts of Bulgaria, the price of a kilo of bread has reached the psychological price barrier of one lev. The price is expected to stabilise within the range of 1.20 leva to 1.50 leva a kg by the end of 2007.

An increase in the price of meat products is expected as well. While prices of veal and poultry products in Bulgaria are currently cheaper than in EU member states, there could be a price increase of up to 30 per cent.

Pork is another picture. As an EU member state, Bulgaria will lift bans and protective customs duties for other EU countries.

Cigarette prices will remain the same in the beginning of 2007, representatives of Bulgartabac Holding told a news conference on December 11.

Imported meat, sausages, fruits, vegetables and cereals will probably increase their market share in Bulgaria. As for white and brown goods, expectations are for price hikes as well. The projected incease is 10-12 per cent.

According to to Georgi Miloushev of the Zora consumer goods retail chain, prices will increase because of  new ecological regulations that will come into effect as of January 1 2007, as well as because of higher excise duties on fuels. Currently, electrical appliances are cheaper in Bulgaria than elsewhere in Europe and the country’s EU membership will push prices up until they reach EU levels, Miloushev said in late November, as quoted by Bulgarian news agency BTA.

“What we see today are EU tourists buying stoves and fridges while on holiday in Bulgaria,” Miloushev said.

Taxi fares and bus tickets will be more expensive as of January as well, because of new excise duties. Per-kilometre taxi fares will increase by between 0.08 and 0.10 leva, while bus companies intend to increase ticket prices by between eight and 20 per cent.

The National Electricity Company (NEC) has submitted a request to the state energy regulator for approving a 1.5 per cent price increase. As of October 1, NEC has raised sales prices to distributors by 6.8 per cent, while the average end-user increase is estimated at just 1.5 per cent. Price of natural gas will also increase next year. According a memorandum signed on December 18 between Bulgaria’s Bulgargaz and Russia’s Gazprom, the average import price of natural gas will rise by 10 per cent in April 2007 and by about 40-45 per cent until 2013.

Charges on import of used cars from EU member states will most certainly decrease.

This also applies to prices of property that do not suffer from a high inflation rate. However, Bulgaria will have to meet EU quality requirements in terms of construction, which will bring up construction prices by an expected increase of between three and five per cent. On December 18, the price for construction in Sofia was increased from 0.7 leva to 14 leva a sq m.

Meeting EU requirements will mean increases in restaurant and hotel prices as well.

As for prices of imported medicines, it is expected that they will halve after restrictions requiring purchases of drugs solely from the manufacturer country are lifted.