Accelerating inflation and high unemployment rate predicted by Raiffeisenbank

The inflation rate in Bulgaria will reach 4.8% at the end of 2012, an analysis of Raiffeisenbank predicts. The bank’s previous forecast was for annual inflation of 4.4%. The Centre for Economic Development had forecast this at around 4%, and the Government – even lower. In the analysis of Raiffeisenbank for October, the expected monthly inflation was 0.6%.

The analysis notes that the inflation rate has accelerated strongly for a second time over the last three months. In September, its monthly rate reached 1.1% (the figure registered two months earlier - in July - was 1.5%). Contrary to the predictions of a slowdown in price dynamics of foods, it reaches very high values again. The price index for this group of goods has increased by 2.6%, compared to 0.6% in July and 0.9% in August on a monthly basis. The biggest rise was seen in the prices of vegetables (7.2%), fruits (6%), meat and meat products (4.3%). The prices of most of the other foodstuffs also increased, albeit at lower rates. For instance, the prices of milk, dairy products and eggs rose by 1.3%, these of bread and cereals – by 1.2%, of animal and vegetable oils and fats – by 1.1%. A slight decline was registered in the prices of mineral water, soft drinks, fruit and vegetable juices - 1.3%, of coffee, tea and cocoa -1%.

The acceleration of the monthly rate of price growth of non-foods was trifling - from 0.5% in August to 0.7% in September. The highest price rise in this group was that of fuels - from 2% to 3.3%, followed by household goods for short-term use (1.7%) and others. A decline was reported in the prices of telephones, faxes and similar appliances (2.3%), photographic and cinematographic equipment, optical instruments and equipment (1.5%). In the non-food sector, only the group of services registered a general decline in prices in September - 0.6%, mainly due to the seasonal decline in tourist travel.

Raiffeisenbank’s analysts predict that the seasonal factors will no longer be having an affect on the unemployment rate as of October, resulting in an increase of its rate anew. Their forecasts for the entire 2012 are for quite a high unemployment rate on average - 12.2% of the economically active population.

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