Bulgaria's consumer price deflation deepened to 1.6% y/y in September from 0.7% in August, according to statistics office data. The decrease was largely due to administratively regulated price cuts and in particular the two reductions of the energy price in the country administered by the state energy regulator this year (a 7% average decrease effective since March and a 4.3% cut effective since August). As a result, the price of electricity fell 11.1% y/y in September 2013. Housing and utilities were also 6.1% cheaper than a year earlier.
The high base effect also contributed to the drop in annual inflation. The hot summer in 2012 reduced the output of vegetables, fruits and cereals, pushing the price of food by 6.5% y/y in September 2012. On the other hand, this year's exceptionally good harvest in Bulgaria translated into a 0.3% y/y drop in the price of food in September.
Health and transport prices declined by 3.1% y/y and 3.2% y/y, respectively.
On a monthly basis, consumer prices increased in September following a six-month period of decline. The monthly inflation was recorded at 0.1% in September as a result of higher food prices (mainly vegetables), in line with the seasonal trend.
The statistics office also informed that the EU-harmonised CPI inflation (HICP), used as a benchmark for the euro adoption, slipped 1.3% y/y and 0.3% m/m in September.
|Bulgaria's CPI, y/y, %||Weight in the basket, %||Jul-13||Aug-13||Sep-13|
|Alcoholic beverages and tobacco||5.3||0.7||0.7||0.7|
|Clothing and footwear||3.8||-0.6||0.0||0.2|
|Housing, water, electricity, gas and other fuels||17.8||-3.4||-5.7||-6.1|
|Furnishings, household equipment and routine household maintenance||3.6||-0.4||0.7||-0.5|
|Recreation and culture||4.3||0.2||0.2||-2.7|
|Restaurants and hotels||5.1||4.0||4.1||3.4|
|Miscellaneous goods and services||4.3||1.2||0.8||0.2|
|Source: statistics office|
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