Bulgaria now can be characterized by decreasing inflation and high economic growth, which creates an extremely favorable economic environment for the country, according to Bulgarian Prime Minister Sergey Stansihev.

Stanishev spoke Friday before the Parliament during the three-hours long discussion regarding the price hike in Bulgaria. The discussion concluded with the decision that by October the Cabinet should introduce in the Parliament an analysis of the reasons for the price increase.

According to the PM, the main factors triggering high inflation rates in Bulgaria were external ones, mainly the price shock rattling the global economic processes and the trading of goods on the world markets.

The fact that Bulgaria has the lowest price levels in the European Union is considered by the Premier as the main internal reason for the inflation observed in the country. Stanishev pointed out that due to those levels Bulgaria would continue to experience higher inflation rates than the average in the EU while adapting its income and prices to the EU median.

The PM explained that unlike Bulgaria, many countries experience low economic growth and high inflation, which was a troublesome phenomenon, luckily not characteristic for our country. For the third year in a row, the economic growth in Bulgaria is 6%, even 7% for the first trimester of 2008 while only Bulgaria, Ireland and Romania had registered industrial growth in May of 2008, compared with the previous month.

Stanichev also made an analysis of the Cabinet's social policy beginning with the retirement pensions. He pointed out that in the last two years they have been increased five times - once each six months thus increasing the retirees' purchasing power. A new mechanism for determining the minimum retirement pension has also been introduced.

The PM further explained that the number of families receiving social assistance was constantly decreasing and this reduction had become a permanent trend in the 2005 - 2007 period.
Since the beginning of 2007 income in Bulgaria registers high rates of increase both in nominal and real values. The increase rate of the average salary is higher than the inflation one. In 2005 - 2007, the purchasing power had gone up with 27% while in 2007 the total financial wealth of all Bulgarians has reached BGN 31 B.

In conclusion Stanishev summarized 15 concrete measures to be undertaken by the Cabinet, despite the decreasing inflation.

Among them the most important are: realisation of a budget surplus of 3% from the Gross Domestic Product (GDP) for 2008, a budget expense ceiling not higher than 40% of the GDP, introduction of a new Law for the Protection of the Competition, increasing the internal audit powers for the control of the budget, binding financing with achieved results, determining the risk companies and market segments on a national level and their regular monitoring.

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