June 7 (SeeNews) - Bulgaria's average annual inflation is expected to reach 11.9% this year, the finance ministry said, revising upwards its projection for a 5.6% rise in consumer prices made in February, prior to the start of the war in Ukraine.
The adjustment is mainly due to the higher-than-expected increase in the prices of food and non-energy non-food prices, the ministry said on Monday in a proposal for revision of the 2022 budget.
End-year inflation is projected at 11.6%, mainly due to an estimated 23.9% annual increase in food prices, the finance ministry said. Prices of services will rise by 9.8% year-on-year at the end of 2022, while non-energy non-food prices will go up by 7.1%.
The annual rate of increase in the prices of motor fuels is projected to slow down to 13.9% at the end of the current year.
The budget revision draft foresees elimination of excise duty on electricity, liquefied natural gas (LNG) and natural gas, reduction of value-added tax (VAT) rate on natural gas deliveries to 9%, and a 0.25 lev per litre subsidy on retail prices of petrol, diesel and fuel gas.
These and other measures in support of individuals and businesses will cost the state budget around 2 billion levs ($1.1 billion/1 billion euro), or 1.3% of the gross domestic product (GDP) forecast for 2022.
Taking into account the uncertain international environment and the expected adjustments in the overall budget of the European Union, there will also be an increase of 156.6 million levs in Bulgaria's planned contribution to the EU budget, which was set at 1.68 billion levs in February.
The budget revision is due to be tabled to parliament for approval later this week, with the support measures expected to take effect on July 1.
Bulgaria's consumer prices rose by 14.4% year-on-year in April, following an annual increase of 12.4% in March, the statistical office said last month.
(1 euro = 1.95583 levs)