Tallinn  - Consumer prices in Estonia dipped by nearly 1 per cent in August compared to the same year-ago period, with the biggest reductions in food and transport, according to data released Monday.

Statistics Estonia said the consumer price index fell by 0.9 per cent in August 2009 versus August 2010. The index was unchanged compared to July 2009.

Martin Lindpere, an economist with the Estonian central bank, said the fall had been slightly bigger than expected.

"However, it must be taken into account that August is characterized by seasonal factors that tend towards falling prices," he said in a statement.

The biggest price reductions came in food (minus 5.7 per cent) and transport (minus 6.2 per cent).

Prices in Estonia have now been falling since May.

With prices now seemingly under control, the government of Prime Minister Andrus Ansip is keen to join the eurozone as quickly as possible, with a 2011 the target date.

After a decade-long boom fuelled by cheap credit and a housing market bubble, the small Baltic republic of just 1.3 million people is suffering one of the European Union's deepest recessions. (dpa)