ECONOMY

Economist predicts inflation will drop below 3 percent in October

Inflation in October is expected to drop below 3 percent for the first time this year on the back of favorable base effects and lower fuel prices, EFG Eurobank Ergasias economist Platon Monokroussos predicted in a research note yesterday. The National Statistical Office is due to release consumer price index (CPI) figures on Friday. Monokroussos said that the motor fuels subcomponent, which has a weight of 3.23 percent, is projected to have re-entered the CPI basket at a sharply lower level than a year ago, based on the estimated 8.5 to 9 percent drop in September. We expect the energy subcomponent to slash around half a percentage point (monthly basis) off headline CPI in October, he said. According to Monokroussos’s calculation, the lower fuel estimate and the neutral fruit and vegetable reading are expected to take October inflation to 2.9 percent, a major reduction from the 3.6- percent figure posted in September. The projected decline in October prices is set to continue to the last two months of the year. The Eurobank economist forecast CPI coming in at 2.7 percent in November only to rise to 2.9 percent in the last month of the year on the back of seasonal factors. Based on the revised figures, Greek average CPI for the year is now projected at 3.4 percent, down from an earlier forecast of 3.5 percent. Speaking at the national tourism council in Thessaloniki, held in conjunction with the international tourism fair Philoxenia in Thessaloniki, Development Minister Akis Tsochadzopoulos said the ministry will adopt a long-term strategy for the tourism industry.