Greek Dec CPI seen at 9-yr low of 2.3 pct y/y

ATHENS - Greek consumer price inflation in December is seen slowing to its lowest level since Oct 1999, dragged down by falling energy prices and weak domestic demand, economists said on Friday.

By (Reuters)

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Published: Fri 9 Jan 2009, 7:15 PM

Last updated: Thu 2 Apr 2015, 4:13 AM

December inflation probably eased to a 2.3 percent annual pace from 2.9 percent in November and averaging out at 4.2 percent for 2008, according to the average of four economist forecasts.

“Dropping international oil prices, coupled with weakening domestic demand ... resulted in a faster than expected fading of headline inflationary pressures,” said Nikos Magginas, an economist at National Bank of Greece.

The shooting of a teenager by police that sparked riots at city centres stifled Christmas shopping.

“Key drivers ... are the high base effect of last year’s energy prices as well as the negative impact to aggregate demand due to the recent riots,” Piraeus Bank economist Ilias Lekkos said.

Still, Greece’s projected inflation in December will be higher than the average consumer price inflation in the euro zone.

Euro zone inflation dropped more than expected to 1.6 percent in December, a 26-month low, after sharp falls in energy and food prices.

“Relatively healthy domestic demand, combined with intrinsic rigidities in domestic markets, will ensure that Greek inflation will remain above the euro zone average in 2009,” said Diego Iscaro, an economist at Global Insight.

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