Bulgaria Posts Deflation for 13th Month Running in August

Bulgaria's consumer prices fell 0.6% year-on-year in August, marking the 13th straight month of deflation, official figures showed on Monday.

The drop in consumer prices, however, has slowed down for a third month running, compared to the hefty decline of over 2.5% in February 2014.

The slowdown is in line with the latest forecast of the Bulgarian National Bank, which said last month that consumer prices would keep decreasing in the remainder of the year, albeit at a lower rate.

Caretaker Finance Minister Rumen Porozhanov said earlier this month that the cabinet expects the Bulgaria's economy to grow by 1.5%-1.6% in 2014 with deflation for the full year projected at 0.2%-0.3%.

August consumer price index (CPI) was also lower month-on-month, declining by 0.2% after edging up 0.4% in July, which was only the second monthly rise since the beginning of 2014.

In August, food prices decreased 0.5% month-on-month, footwear and clothes dropped 3.5%, while alcohol and tobacco prices rose 0.2% and house rents and utility services edged up 0.1%.

Transport prices rose 0.5% on the month in August, while the prices of communications and hotel and restaurant services remained unchanged compared to July.

According to figures released by the National Statistical Institute (NSI), cumulative consumer price inflation for the first eight months of the year was negative at minus 1.2%.

Bulgaria's consumer prices for the year to end-August 2014 were 1.7% lower than they had been in the equivalent period a year earlier, the NSI said.