Bulgarian consumer prices inflation was 0,1% in May, down from 0.5% the previous month, the country's statistics board NSI said on Tuesday.

Preliminary data by the NSI showed food prices falling by 0,6%, while the non-food part of the consumer prices index added 0,6%.

Prices for services grew by 0,3%, with the biggest jump reported by transport prices - 2,1% for a second straight month.

Year-on-year inflation at the end of the month rose to 4,3%, compared to 4,2% in March. Cumulative inflation for the first quarter of the year was 2,4%.

Bulgaria's economic forecasts agency AEAF sees the annual inflation figure falling to 3,4% in 2007, which would allow the country to join the Exchange Rate Mechanism (ERM II) already this year and the euro-zone in 2009.

But if the massive wage hike demands by employees from the state sector are granted, the additional inflationary pressures would make reaching the target virtually impossible.

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