Inflation dropped to new lows last month

Inflation marked a new 40-year low as it dropped to 1.6 percent year-on-year last month, the National Statistics Service (NSS) announced yesterday. Economists had estimated the February rate to come to 1.8 percent, as it did in January 2009. On a monthly basis, headline inflation dropped by 0.9 percent. Core inflation edged lower than it was in January, dropping from 3.1 percent to 3 percent. The decline in the rate is partly due to the winter sales period, which ran from mid-January to end-February. This led to a 9.2 percent monthly drop in apparel prices and a 2 percent decline in household goods and services. Prices at hotels, cafeterias and restaurants have dropped by 1.3 percent, mainly because January prices were raised by the Christmas bonus levied and because hotels let their rates drop. Interestingly, communication prices also declined by 0.5 percent, thanks to a drop in cellular telephony charges. On the other hand, food and drink prices posted 0.6 percent growth due to seasonal rises in dairy products, eggs, fish and vegetables. Gasoline prices also edged higher in February. NSS general secretary Manolis Kontopyrakis predicted yesterday that the consumer price index will decline further in March «by 0.3 percent at least,» due to the significant rise in fuel rates in the same month last year, «while, in the first 10 days of March, prices of heating oil and gasoline have both moved lower.»

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