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Inflation Falls to 0.9% as Prices of Energy, Food Continue to Stabilise (adds)

Ljubljana, 29 July (STA) - Annual inflation in Slovenia fell 0.4 percentage points to 0.9% in July on the back of a continuing stabilisation in the prices of food, fuel and other energy products.

The drop in annual inflation comes on the back of a monthly consumer index figure that shows prices dropping by 1.1% on average in July, the Statistics Office said on Friday.

The annual inflation rate has fallen to one of its lowest levels yet since independence with the help of stabilisation of energy and food prices, which were the catalyst of inflation last year.

The highest annual increases in prices were seen with alcoholic beverages and tobacco, which were up by 5.4% mostly due to higher excise duties, according to data from the Statistics Office.

The housing category, in which energy prices hold a large share, was up 4.4%, but this is less than in the same period last year.

Moreover, food prices are now up only 2.9% over July 2010, continuing a trend of stabilisation after a spike in 2010.

The biggest drop in prices on the same month last year was seen in the hospitality sector (10.2%) and in clothing and footwear (by 4.2%).

The latter category also contributed the most to the overall monthly drop in prices, as summer clearance sales helped bring about an average drop in prices in the group by 15.9%. Food and beverage prices were down by 1.1% for the month.

Statistics Office director Irena Krizman pointed out at today's press conference that this was the third month of deflation this year.

Meanwhile, the Institute of Macroeconomic Analysis and Development (IMAD) said the latest inflation data was expected and that trends were being influence by weak economic activity.

IMAD highlighted that the consumer price index for the first seven months of the year stood at 0.7%, the lowest in the last decade.

Measured with the harmonised index of consumer prices, the EU standard, prices were down by 1.1% at the monthly level and up by 1.1% year-on-year, the Statistics Office added.

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