Consumer prices in Slovenia dropped by 0.5% at the annual level in January. At the monthly level prices plunged by 1.4% driven by the strong decline in fuel prices and winter sales, the Statistics Office said on Friday.

A 19.2% drop in the price of liquid fuel and a 10.2% decline in the prices of fuels and lubricants contributed 0.7 percentage points to the annual deflation.

Other major factors included cheaper holiday packages, air fares, used cars and gas.

On the other hand, more expensive telecommunications services pushed the annual rate 0.2 points higher while fruit and electricity prices added 0.1 points each.

At the monthly level double-digit decreases in footwear and clothing prices, a result of winter sales, contributed a whole percentage points to the monthly deflation.

Cheaper fuel contributed another 0.4 points.

The only noteworthy category that registered a monthly price increase was vegetables, which contributed 0.1 points to the monthly rate.

The harmonised index of consumer prices, an EU benchmark, was at -0.8 points at the annual level. The monthly rate was -1.3%.

The continuation of deflation, now well into the second year, is no surprise. The EU's latest projections suggest Slovenia will be one of only three member states this year to see prices decline throughout the year.