ECONOMY

Survey says September inflation seen at 3.3 percent year-on-year

Greece’s inflation is expected to slow for a second consecutive month in September, thanks primarily to a significant drop in international oil prices, economists said yesterday. Six economists surveyed by Reuters produced a 3.3 percent median forecast for year-on-year inflation in September compared with a 3.5 percent headline rate in August. «The substantial fall in gasoline prices will cut an estimated 0.35 percentage points from September CPI inflation, while an additional downward effect in the order of 0.1 percentage points may be expected from lower fresh fruit and vegetable prices,» Alpha Bank economist Dimitris Maroulis said. Despite coming down from a peak of 3.7 percent in July, Greece’s consumer price inflation continues to outpace the eurozone average, which in September reached 1.8 percent, its lowest since March 2003. Greece has projected 3.2 percent inflation for this year and 3.0 percent for next year. Economists said that unless oil prices rise significantly again, Greece was likely to meet its targets. «Under the assumption that oil prices will remain between $58 and $68 per barrel and that the euro-dollar exchange rate will approach 1.30 by year-end, the average annual inflation rate will range between 3.2 and 3.4 percent in 2006,» National Bank economist Nick Magginas said. While economists expect that inflation slowed in September, they see it picking up again due to the winter season. «The drop in oil prices is likely to have contributed to a deceleration in inflation to 3.4 percent; however, we are likely to have a pickup in inflation as the price of housing heating oil will reflect new higher prices,» said Piraeus Bank economist Michael Lambrianos. (Reuters)