Greek consumer prices fall 1.3 pct y/y in August
Greece stayed in deflation territory for the sixth month in a row in August as consumer prices fell 1.3 percent on an annual basis after a drop of 0.7 percent in July, statistics service data showed on Monday.
August’s rate fell below a forecast of -0.9 percent. The EU-harmonized inflation reading slowed to -1.0 percent from -0.5 percent in the previous month.
Ample spare capacity and wage cuts amid a deep recession continue to exert downward pressure on prices, setting in motion an internal devaluation process that could render the country’s economy more competitive.
Falling wages took time to be transmitted to lower consumer prices despite the economic slump, with Greece’s EU/IMF lenders attributing the relatively slow pace of price declines to inadequate product market reforms.
Price dynamics are seen keeping Greece’s inflation rate below the eurozone’s average in the medium term, according to the International Monetary Fund.
Inflation in the 17 countries sharing the euro is estimated to have slowed to 1.3 percent in August. [Reuters]