UPDATE 1-Greek inflation evaporates as downturn weighs

Fri Feb 15, 2013 6:06am EST

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ATHENS, Feb 15 (Reuters) - Greek inflation evaporated in
January, hitting its lowest level since data began in 1996, the
national statistics service (ELSTAT) said on Friday, as the
country's economic downturn sapped consumer price pressures.
    The EU-harmonised consumer inflation rate (HCPI) was 0.0
percent year-on-year in January, ELSTAT said, below a 0.2
percent forecast in a Reuters poll of economists.
    "The disinflation process continues as the pass-through from
wage adjustments is strengthening and domestic demand remains
under pressure," said Eurobank economist Platon Monokroussos.
    "I would not exclude negative CPI inflation readings in the
following months, although recent electricity price increases
may temporarily constrain the adjustment in consumer prices," he
    Five years of austerity-driven recession have brought Greek
price rises to a halt after a debt-fuelled boom since the
country joined the euro in 2001 led inflation to accelerate at
almost twice the average euro-area pace.
    Cuts in public sector pay and pensions have contributed to
an internal devaluation process aimed at making the 195 billion
euro economy more competitive.
    In 2012, Greece's HCPI rate dropped below the euro zone
average for the first time since Athens joined the euro. The
government and the EU expect Greece to be in deflation territory
this year with the HCPI rate dropping to -0.8 percent.
    Greece's economy is expected to shrink again this year, by
4.5 percent, bringing total GDP contraction since the recession
began to almost a quarter. Households' real disposable income
over the past three years has shrunk by almost a third.
    Unemployment has climbed to an all-time record of 27
percent, the highest in the 17-nation euro zone, also dampening
price pressures.
    KEY FIGURES             JAN   DEC    NOV    OCT      
    EU-harmonised           +0.0  +0.3  +0.4   +0.9
    source: ELSTAT
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Comments (1)
Digmne1 wrote:
That is great news.
I think the whole western world needs to go into deflation, reduce wages, house prices and fat cat CEO salaries so that we can become competitive with Asia and starting creating jobs once again.

Feb 16, 2013 6:18pm EST  --  Report as abuse
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