Greek official inflation slows further in August

7th September 2011, Comments 0 comments

Greek inflation slowed to 1.7 percent in August from 2.4 percent in July on a 12-month basis, official data showed on Wednesday as the country struggles against a deepening recession.

And prices also fell by 1.4 percent on a monthly comparison, the Hellenic statistical authority said in a statement.

Average inflation over 12 months was 4.1 percent, up from 3.5 percent a year ago.

The main rise on a monthly basis was in health costs which crept up by 0.2 percent, while alcoholic beverages and tobacco rose by 0.1 percent.

On an annual basis, the housing index rose by 8.2 percent, transport by 4.4 percent and food, non-alcoholic beverages, and miscellaneous goods and services by 2.6 percent.

The Socialist government, which is labouring to apply a draconian austerity programme mandated by the European Union and the International Monetary Fund after accepting a rescue loan last year, foresees an average inflation rate of 2.2 percent for 2011.

But it has already admitted that other forecasts -- most notably the public deficit -- will be thrown off-mark by a greater-than-expected contraction in the economy that could exceed five percent of output this year.

Successive sales tax rises imposed among other deficit-cutting measures last year drove overall inflation in 2010 to 4.7 percent.

Another tax rise was imposed on food at restaurants and hotels on September 1.

The German constitional court, in a critical ruling for Greece and the eurozone, ruled on Wednesday that debt rescue arrangements for Greece were legal under German law.

© 2011 AFP

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