Inflation rises to 13-yr high on tax hikes

Consumers are feeling the pinch of rising prices, according to data released yesterday which showed the cost of goods and services rising at a fast pace last month. Consumer price inflation accelerated to 5.4 percent year-on-year in May, its highest since August 1997, on tax hikes and soaring transport costs, said the Hellenic Statistical Authority (ELSTAT). Consumer prices rose 0.8 percent month-on-month. In the same month a year earlier, the annual rate of inflation was 0.5 percent. The rate of consumer price hikes in the 16 countries sharing the euro was slower, rising 1.6 percent year-on-year in May from 1.5 percent in the previous month. ‘Higher oil prices and the tax rise in tobacco, alcohol and fuel led to inflation increasing to 5.4 percent,’ Nikos Magginas, economist at National Bank, told Reuters. ‘This rising trend will carry on till July, fueled by the increase in value-added tax. A drop in inflation should be seen in the last three months of the year.’