ECONOMY

Inflation eases to 1.4 pct in August

Greece?s inflation rate dropped for a second month in August as retailers slashed prices during the summer sales season. The annual rate calculated using European Union methods fell to 1.4 percent from 2.1 percent in July, the Hellenic Statistical Authority (ELSTAT) said in an e-mailed statement from Athens on Wednesday.

Economists expected a 2 percent reading, the median of five estimates in a Bloomberg News survey showed. Using Greek methods, the rate was 1.7 percent. Greece now has the third-lowest inflation rate in the euro region behind Slovenia and Ireland, less than a year after it had the region?s highest.

Increased sales taxes introduced as a condition of the 110-billion-euro bailout from the European Union and the International Monetary Fund pushed the rate up to 5.7 percent in September 2010.

Prices for clothing and footwear fell 10.7 percent in August as retailers sought to attract shoppers amid the third year of a recession, according to the statement.

Retail sales declined at the fastest pace in three years between the middle of July and the end of August, when discounts are permitted, the National Federation of Greek Commerce (ESEE) said on September 1.

The EU and the IMF forecast Greek inflation will average 2.9 percent this year, compared with 4.7 percent in 2010, according to the fourth review of Greece?s progress in meeting the bailout conditions.

(Bloomberg)