Greek consumer prices drop in September after three-month rise

[ATHENS] Greece's annual EU-harmonised inflation rate turned negative in September after a positive reading in the last three months, statistics service data showed on Monday.

The reading in September was -0.1 per cent, down from 0.4 per cent in August, coming in below market expectations. Analysts polled by Reuters were forecasting a 0.4 per cent print.

Consumer prices were led lower by housing, foods, non-alcoholic beverages and durable goods.

The data also showed the headline consumer price index fell 1.0 per cent year-on-year, with the annual pace of deflation picking up from -0.9 per cent in August. Analysts were expecting a -0.7 per cent reading.

For years an inflation outlier in the eurozone, Greece has been in a protracted deflation mode since March 2013 based on its headline index, as wage and pension cuts and a multi-year recession took a heavy toll on Greek household incomes.

Deflation in Greece, which signed up to its first international bailout in 2010, hit its highest level in November 2013, when consumer prices registered a 2.9 per cent year-on-year decline.

The eurozone's inflation rate doubled in September as the impact of weaker energy prices diminished, although the core rate also watched by the European Central Bank was unchanged for the fourth consecutive month.

Inflation in the 19 countries sharing the euro was 0.4 per cent last month from 0.2 per cent in August. The headline inflation rate remains far from the ECB's target of just below 2 per cent, although its increase is good news for the central bank which is seeking to prevent a deflationary spiral.

REUTERS