Greek inflation to fall next year, report

Greek inflation is expected to fall in the coming months, Alpha Bank analysts predicted in a published bank bulletin released on Thursday.

 

Greek inflation slowed to 5.2 pct in October, down from 5.6 pct in September, while the core inflation rate slowed to 3.5 pct from 3.6 pct over the same period, respectively.

This trend is expected to continue in the coming months, the bank’s analysts said, citing the end of the impact of large increases in indirect taxes and lower labour cost per product unit by -1.6 pct this year, from +5.6 pct in 2009. Average inflation is projected at 4.7 pct this year, and 1.8 pct in 2011.

The bank’s analysts said manufacturing production fell 5.3 pct in the nine-month period between January and September, after a decline of 12.2 pct last year.

Production is expected to improve in the fourth quarter. Building activity shrank further in August (-24.8 pct) for a decline of 28.5 pct in the January-August period. The bulletin noted that the home price/rent price ratio eased further reflecting a fall in home prices.