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CPI has historical 0.5% drop

Figures

The consumer price index dropped 0.5% in September compared with a year earlier the Central Statistics Office (KSH) reported today. This was the largest such drop recorded since the change of regime in 1989.

The decrease, driven by cuts in utility prices, surprised analysts, who had almost uniformly predicted a 0.3% drop in the CPI.

Year-on-year in September, the price decrease of electricity, gas and other fuels was the highest (12.0%). Consumers paid 16.9% less for natural gas, 11.4% less for purchased heat and 11.3% less for electricity. Overall food prices increased 0.2% year-on-year, led by milk (5.1%) and cheese (5.3%). Prices decreased for sugar (-16.4%), edible oil (-10.8%), flour (-10.5%) and bread rolls (-2.4%). A significant year-on-year price increase was also seen in the case of alcoholic beverages and tobacco, which went up 3.3%. Services rose in price by 1.6%. Prices of cultural, educational, entertainment services increased by 2.5%, while local transport decreased by 6.8%. Consumers paid 0.7% less for consumer durable goods, 0.6% less for other goods. Prices of motor fuels also decreased by 2.1%.Clothing and footwear, prices decreased by 0.5%. 

In September month-on-month consumer prices decreased by 0.2%. Food prices dropped by 0.1% overall. Prices of chocolate and cocoa decreased by 3.7% and flour by 1.0%. Prices of edible oil (1.1%), egg (1.0%) as well as seasonal food items i.e. potatoes, fresh vegetables, fruits (0.6%) increased. As for services, the price decrease was measured (0.8%), within the group prices of recreational services decreased by 6.8%. Consumers paid 0.3% less for consumer durable goods.

Month-on-month, the price increase in clothing and footwear was the highest (1.2%), which KSH explains with the seasonal changes. In case of other goods (including household and pharmaceutical products, as well as motor fuels and recreational goods) prices increased slightly by 0.2%. Prices of motor fuels grew by 0.8% month-on-month, while electricity, gas and other fuels rose by 0.1%. Prices of alcoholic beverages and tobacco stayed unchanged in a month-on-month comparison. 

According to KSH the drop is in line with the EU tendency as in the 28 member states of the EU according to provisional harmonized data the annual inflation was 0.5% in August 2014 compared to August 2013. The highest annual price decrease was observed in Bulgaria (-1.0%) and Spain (-0.5%), and the highest price rise in Austria and the United Kingdom (both 1.5%).

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