Oil price hikes dash hope for inflation dip

Oil prices flirting with $120 a barrel and a busy Easter market dealt a blow to the government’s hopes for even a slight decline of inflation in April. According to provisional National Statistics Service (NSS) data, the general consumer price index (CPI) remained stuck at 4.4 percent for the third consecutive month. This brought the four-month average this year to 4.3 percent, making even the Finance Ministry’s revised forecast of 3.5 percent for 2008 seem rather too optimistic. Besides, all indications are that strong inflationary pressures will remain in the months ahead. For a start, the May CPI will be burdened by the impact of hikes in public transport and taxi fares. In addition, producer price inflation (PPI) picked up to 9.9 percent year-on-year in March from 9.8 percent in February, and will impact retail prices in the months ahead. According to the NSS, the spike in producer prices has been fueled by developments in global oil markets, foodstuffs and raw materials. In fuels, producer prices were up 30.1 percent, while the prices of materials for electrical machines and appliances rose 48.5 percent. In the foodstuff and beverage industry, the increases were 6.8 percent, in the production of chemicals 7.5 percent and in metallurgy 5.2 percent. The increase brought the 12-month average PPI annual rise ending in March to 5.2 percent. Meanwhile, Greece’s retail sales by volume fell 4.3 percent year-on-year in February, tumbling from a 3.4 percent year-on-year increase in January, the NSS said. Retail sales by turnover fell 0.8 percent year-on-year in February after a 5.9 percent rise in the previous month. (Kathimerini, Reuters)