Bulgaria's consumer prices turned to decline in August for the first time since November 2009 mainly on the back of lower energy prices, according to statistics office data. The CPI fell 0.7% y/y in August, following a 0.5 increase in July.
The price of electricity was 11.1% lower in August than a year earlier. This is a result of the cuts administered by the state energy regulator this year (a 7% average decrease effective since March and a 4.3% cut effective since August). Furthermore, the price of gas fuels fell 4.9% y/y and the price of heat energy - 9.6% y/y.
With the exception of food prices, which rose 1.2% y/y in August, prices of other major goods and services also decreased. Housing and utilities were 5.7% cheaper than a year earlier, while health and transport prices declined by 3.7% y/y and 1.9% y/y, respectively.
On a monthly basis, consumer prices declined for the sixth month in a row. In August, deflation was recorded at 0.6%. Electricity prices fell 4.3% m/m. In addition, the price of food inched down 0.8% m/m and is expected to continue to decline due to the exceptionally good harvest in Bulgaria (and the world) this year.
The statistics office also informed that the EU-harmonised CPI inflation (HICP), used as a benchmark for the euro adoption, slipped 0.7% y/y and 0.2% m/m in August.
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