19 July 2006

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Business Today

High inflation breaks two month spell

Kurt Sansone

The yearly inflation in Malta during the month of June, measured by Eurostat standards, registered a slight drop of 0.2 percentage points over the May inflation and now stands at 3.3 per cent, an improvement but still higher than the magical three per cent threshold required to satisfy the Maastricht criteria for adopting the Euro.
Data released by Eurostat on Monday shows that inflation in Malta broke its two month run of 3.5 per cent between April and May, to crank down to 3.3 per cent.
The yearly inflation between June 2005 and June 2006, is however still substantially higher than the previous year’s (June 2004 and June 2005) inflation, which stood at 2.1 per cent.
Eurostat measures inflation through a harmonised index of consumer prices (HICP), which makes it possible to compare inflation across the EU25. HCIP inflation is not strictly comparable to inflation as measured by the retail price index (RPI) compiled by the National Statistics Office. While RPI is representative of private households only, the HICP covers private households, institutional households and foreign visitors to Malta.
Malta ranks fifth among EU member states outside the Euro area with the eastern bloc countries, Latvia, Slovakia, Estonia and Lithuania recording substantially higher inflation rates.
Three countries forming part of the Euro area, Spain, Luxembourg and Greece also have inflation rates above the three per cent mark.
The Euro area inflation was 2.5 per cent in June 2006, unchanged when compared to May. A year earlier the rate was 2.1 per cent.
EU25 annual inflation was 2.4 per cent in June this year, which was also unchanged when compared to May. Last year the rate was two per cent.
In June 2006, the lowest annual rates were observed in Finland, Poland (both 1.5%), the Netherlands and Austria (both 1.8%). On the other hand, the highest rates were recorded in Latvia (6.3%), Slovakia (4.5%), Estonia (4.4%) and Spain (4%).

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