Inflation registered a drop in May and the country’s economy grew at a substantial rate in the first quarter of this year, according to figures presented yesterday by the National Statistics Service (NSS). Year-on-year inflation in May slipped to 3.4 percent from 3.8 percent in April, a development attributed mostly to a drop in fuel prices and telephone rates, which had an impact of -0.43 and 0.15, respectively. On the other hand, higher cigarette prices pushed upward. First-quarter growth came to 4.3 percent of GDP, compared to the same period last year. In real terms, consumption grew at 3.6 percent, capital spending grew by 11.3 percent, exports rose by 5.4 percent and imports by 6 percent. The NSS noted that the increase in the relative importance of exports was at the expense of consumption. Regarding imports and exports, the NSS said that this showed the reduction in the relative contribution of local products on domestic consumption. There was also encouraging news from the retail sales front, with a year-on-year rise of 11.1 percent in March. In the first quarter, retail sales rose an average of 9.6 percent on an annual basis, the NSS said. Large supermarkets showed the greatest increase, rising 12.8 percent over the same period last year, while sales of clothing and shoes increased by 11.1 percent. The NSS said that wholesale inflation grew by 3.1 percent in April, year-on-year, from 3.7 percent in March.