Bosnia’s Federation consumer price index (CPI) declined for the second straight month in September 2013 falling by 0.9% y/y, deeper than a 0.3% y/y decrease in August as falling food, clothing and footwear, transport and health costs offset rising alcoholic beverage and housing charges, the entity’s statistics office said.

The CPI decline reflects subdued household consumption amid rising unemployment and falling real wages and cash inflows from abroad. On the supply side, producer prices have been declining in annual terms since March 2013 partly reflecting higher agriculture harvest. According to data released earlier, the Federation's wheat production in 2013 climbed 12.9% to 77,769 tonnes.

In monthly terms, the CPI edged up 0.1% in September, following a after a 0.2% drop in August. The CPI index fell 0.7% compared to the 2012 average.

Food and beverages price deflation deepened to 1.7% y/y in September from 0.3% y/y the month before. Transport costs continued retreating, shrinking 3.2% y/y in September after a 2.1% y/y contraction in August. Clothing and footwear prices, likewise, fell 10.6% y/y in September, narrowing from a 13.1% y/y drop the month before. Health charges retreated 4.4% y/y in September, following a 3.9% y/y decrease in August.

Alcoholic beverages and tobacco costs continued increasing in September – by 7.1% y/y, slowing slightly from a 7.2% growth in August.

Bosnia’s Federation annual consumer price inflation retreated to 1.6% at end-2012 from 2.9% the year before due mainly to falling clothing and health charges.