ECONOMY

Inflation at 15-month low

Greece’s consumer inflation fell to a 15-month low of 3.1 percent last month, official figures showed yesterday, but remained well above the eurozone average, with economists saying fuel and commodity costs could push it higher again. The headline figure compared with April’s 3.5 percent year-on-year rise in the consumer price index (CPI) and came in below market expectations for a rise of 3.3 percent. The month-on-month rise in the CPI slowed to 0.2 percent in May from 0.7 percent in April. Greece’s EU-harmonized inflation, the figure used by the European Union to calculate its overall rate, also slowed to 3.3 percent in May from 3.5 percent in April. Still, this is almost a full percentage point higher than the overall 2.5 percent for the 12-nation eurozone. «The main figure was clearly below market expectations. However, upside risks remain ahead given strong price increases in oil and other raw material commodities,» said economist Platon Monokroussos at EFG Eurobank. Athens is targeting an average inflation rate of 3.2 percent this year against the European Commission’s 3.3 percent forecast. The country’s central bank has said repeatedly that higher-than-eurozone inflation could hurt the economy’s competitiveness. Falling fresh produce prices helped check inflationary pressures in May, National Statistics General Secretary Manolis Kontopyrakis said. Economists said initial concerns that relatively high wage increases agreed upon this year might fuel inflation were misplaced. Earlier this year, private sector workers clinched a two-year wage deal that will raise pay by 11.3 percent by end-2007 compared with a 3 percent rise for public sector employees. (Reuters)