ECONOMY

Inflation seen increasing to 9-month high

Greek consumer inflation, among the highest in the eurozone, is expected to accelerate to a nine-month high of 2.9 percent in September, from 2.5 in August, on higher oil and food prices, economists said yesterday. «The consumer price index will accelerate considerably in September as the contribution from energy prices will turn positive, bringing inflation to 2.9 percent year-on-year,» said National Bank of Greece economist Nick Magginas. Despite decelerating from a peak of 3.8 percent in July last year, Greek consumer inflation remains above the eurozone average which rose to 2.1 percent in September. The differential is eroding the economy’s price competitiveness. Economists say inflation will probably pick up further in the fourth quarter on higher energy costs year-on-year. The median of 4 forecasts in the poll for the average inflation rate in 2007 stood at 2.7 percent, from 3.2 percent last year. «We expect a mild acceleration of inflation until the end of the year due to higher oil and food prices,» said Elias Lekkos, economist at Piraeus Bank. «Given the limited time left until year-end, this will add only 15 basis points to current inflation, bringing the average for 2007 to 2.65 percent,» he said. Greece has revised downward its estimate for 2007 average inflation to 2.7 from 3 percent previously. The National Statistics Service will release September inflation data on Monday.