Bulgarian consumer price inflation marked a slight decrease for the first time in 16 months to 4.5% in December on an annual basis from 4.6% in November, data of the National Statistical Institute shows.

On a monthly basis, the index inched up by 0.4%, while the annual average inflation for the last 12 months was 2.4%.

Prices of alcoholic beverages and tobacco shot up by 26.4% on an annual basis, while transport charges increased by 10.1%.

Prices of food and non-alcoholic beverages increased 4% annually during the month, while clothing and footwear prices edged up 0.1%. Costs of housing, water, electricity, gas and other fuels rose 3.8% from a year earlier.

Meanwhile, the harmonized index of consumer prices increased to 4.4% on a yearly basis in December and was up by 0.8% on a monthly basis. The harmonized inflation rate takes into account the consumption of foreigners in the country.

A falling GDP and increasing inflation rates have recently raised concerns that Bulgaria may face the risk of stagflation. Such fears were fueled by the rise in producer prices and consumer price index since the beginning of last year, except for a few summer months, alongside with the contraction of the Bulgarian economy.

Double-digit inflation and a growing current account deficit have prevented Bulgaria from joining the ERM II, so-called waiting room to the eurozone, since it joined the European Union in 2007.