Measured with the harmonised index of consumer prices, an EU benchmark, prices were up by 2.1% year-on-year.

The monthly inflation rate was a negative 0.6%, largely due to a 5.8% drop in clothing and footwear prices and lower prices of fruit (-4.5%) and telecommunications services (-2.7%).

Lower prices of clothing and footwear pushed the inflation rate down by half a percentage point, while prices of fruit, telephone and other equipment, and other drops in December contributed 0.1 percentage points each.

Price rises were registered only in the groups recreation and culture (0.5%), miscellaneous goods and services (0.3%), restaurants and hotels (0.2%), housing, water, electricity and other (0.1%), and education (0.1%).

Higher prices of package holidays and higher meat prices pushed the inflation up by 0.1 percentage points each.

At the annual level the highest price growth was recorded in the groups housing, water, electricity and gas (5.0%), food and non-alcoholic beverages, and alcoholic beverages and tobacco (4.9% each), and miscellaneous goods and services (2.8%).

In the group housing, water, electricity and gas, liquid fuel prices went up the most (21.5%), followed by gas (12.3%) and heat energy (9.5%).

Prices were lower in communication (3.3%), clothing and footwear (1.5%) and recreation and culture (1.2%). The prices of goods and services in the group health were the same as a year ago.

Annual price growth was driven by higher prices in the group food and non-alcoholic beverages (0.84 p.p.), housing, water, electricity and other (0.66 p.p.), alcoholic beverages and tobacco (0.27 p.p.) and transport (0.20 p.p.).

The government Institute of Macroeconomic Analysis and Development (IMAD) attributes the easing of inflation to weak domestic economic activity.

As the downturn is expected to continue across the eurozone in 2012, inflation will continue to drop, the IMAD said in a statement.