WEDNESDAY, 11.30AM
THE official inflation rate in December 1997 was an annualised 6,1%, according to the Central Statistical Service, 0,7 percentage points lower than November’s figure. However, the average inflation rate for the whole year was 8,6%, some 1,2 percentage points higher than the 7,4% recorded in 1996 and 0,1 percentage points lower than 1995’s 8,7%.
In addition, the average food inflation rate of 9,4% for 1997 is substantially higher than the corresponding rates of 6,1% for 1996 and 8,7% for 1995. The price index for housing shows an average rate of increase of 8,8% for 1997 — 2,7 percentage points lower than the 11,5% for 1996 and 3,9 percentage points lower than the 12,7% recorded in 1995.
December’s price index saw a month-on-month increase of 0,3% due to an increase in the price index for food (+0,1 of a percentage point) and all other items (+0,2 of a percentage point).
The annualised food price index in December was 6,4%, the lowest recorded since July 1996, when the rate was 4,8%.
“The figure is marginally higher than the 6% we had expected,” said Syfrets economist Sandra Gordon. “We were forecasting an average of 6% for the year, and that is a bit on the conservative side.” Gordon said the latest inflation figures make an interest rate cut more likely, and that this could come sooner than economists had predicted.
“The crisis in Asia is good news for inflation in the future,” she said, as consumers can expect cheaper imported electronic appliances and cars. The softer international oil price is another factor that will keep inflation down, she said. The latest figures show a fairly high increase in the prices of fruit and vegetables, however. “These tend to be very erratic and can turn around quickly,” said Gordon. “All it takes is some good rain.”