After a modest 0.4% increase of prices in July, Bulgaria's average prices of goods and services dropped by 0.2% in August, according to data released yesterday by the national statistics service.
Since the start of 2014 until the end of August, average prices have dropped by 1.2%, showing the calculation of NSI. In fact, in 2014 there have only been two months with a slight price growth: April and July.
The reasons for deflation are seasonal. As a rule, average prices drop this month because of the cheaper fruit and vegetables. This past August, melons and watermelons saw their value drop by 16.6%; tomatoes, by 16.0%; cucumbers, by 5.9%; potatoes, by 6.1%, and onions and garlic by 5.8 and 4.5% respectively.
In the first seven months of the year, Bulgaria also registered a decrease in foreign investment. This is also bad news for the economy, as in combination with deflation it shrinks the profits of the country's businesses.
From January to the end of July, outside direct investments dropped by 23%, according to the latest data of the Bulgarian National Bank, reaching a total of 825.3 million Euro; 245.5 million less than in the same period of 2013.
