Inflation slows to 3.6 pct

Inflation in November eased by 0.1 percentage points year-on-year to 3.6 percent as lower fuel prices offset increases in other sectors, the National Statistics Service (NSS) said yesterday. Economists said a more pronounced deceleration is expected for this month as favorable base effects come into play. «I estimate December consumer prices declining to 3.2 percent, which would result in inflation averaging out at 3.6 percent,» said Platon Monokroussos, economist at EFG Eurobank Ergasias. Greece’s above-average inflation constituted a central theme in the Bank of Greece’s interim monetary policy report released two weeks ago. Forecasting average inflation of 3.6 percent for 2002, the central bank urged the government to take more concrete action to tackle the structural rigidities that have kept prices at high levels. The Finance Ministry in turn has put the blame on businesses, suggesting that price hikes by the sector have pushed up inflation. The government is targeting average inflation of 3.3 percent for this year. Lower fuel prices contributed to a 0.6 percent month-on-month drop in the housing and transportation subindices last month against a 0.7 percent rise in the food and non-alcoholic drink component, the NSS said. On a yearly basis, the hotels and restaurants component posted a 6.4 percent jump, the biggest, followed by alcoholic drinks and tobacco, which went up by 6.1 percent. Harmonized annual inflation in November remained flat at 3.9 percent, the NSS said, putting it significantly above the European Central Bank’s 2 percent ceiling and 170 basis points above the eurozone’s estimate of 2.2 percent. Core inflation is estimated unchanged at 3.5 percent.

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