More good news on inflation
Inflation declined to just 2.5 percent in Greece last month, according to data that will be officially published today by the National Statistics Service (NSS). The price hikes recorded in fresh fruit and vegetables were offset by a containment of fuel prices, the August data will show today. It is expected to strengthen the estimate that inflation will close the year significantly lower than the 3 percent level that the budget had forecast. Economy Ministry officials now estimate that the average inflation for 2007 will probably come to 2.7 percent and will definitely not exceed 2.8 percent, given there are no dramatically negative developments on an international level. The same sources argue that the damage from the recent forest fires is not expected to affect the course of the consumer price index, as, from the reports coming into the ministry, the greenhouses in Ileia have suffered no damage, while the price of olive oil, whose production will be reduced due to the burning of millions of olive trees, is not so much determined by domestic but by European production. The containment of inflation to relatively low levels will assist the government to emerge from forthcoming elections to plan and incorporate into the fiscally tight budget of 2008 an income policy with limited salary and pension increases.
