Greece’s consumer inflation slightly lower in August

Greece’s headline consumer inflation is seen slowing to 3.7-3.8 percent year-on-year in August from 3.9 percent in July, analysts said yesterday. We see inflation in August slightly lower, at around 3.7-3.8 percent, on a favorable base effect in the fuels category since the price increases were smaller than last year, said economist Miranda Xafa at Schroder Salomon Smith Barney. Analysts also expect cuts in mobile phone rates and lower fruit and vegetable prices to help contain inflationary pressures. The National Statistics Service (ESYE) will announce August’s headline inflation figure tomorrow. Economist Jose Garcia Zarate at Standard & Poor’s said the reduction in some mobile phone tariffs from CosmOTE, Panafon and Stet Hellas at the end of July and start of August was likely to have a positive effect on August CPI inflation, while others pointed to the transport costs. There is a favorable base effect in the transport category where last year we had a price increase in local transport costs, said economist Dimitris Maroulis at Alpha Bank. Headline inflation in July remained unchanged at 3.9 percent year-on-year while Greece’s EU-harmonized inflation slowed to 4.2 percent from 4.5 percent in June. At EFG Eurobank, economist Platon Monokroussos was slightly less bullish. He forecast headline inflation coming in between 3.8 and 3.9 percent in August and slightly higher in September, around 4 percent, due to seasonal factors such as price increases in school supplies. But by October, inflation was forecast to head significantly lower. In October we expect a large deceleration, possibly below 3.5 percent, due to favorable base effects, Monokroussos said. Core inflation, which excludes volatile fresh fruit, vegetable and fuel prices, rose to 4.1 percent in July from 3.8 percent in June, according to EFG Eurobank, but is expected to slow to 4 percent in August. ESYE does not officially provide core inflation data. In July, eurozone inflation eased to 2.8 percent from 3 percent in the previous month.

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