Inflation Rate at 5.5 % in July & August

    Greece’s Statistics Agency says inflation stood at 5.5 % in August and July, reflecting tax hikes as the government struggles to tackle its debt load. The greatest increase was in cigarette and alcohol prices, which rose to 19.3% compared to August 2009.  Transportation costs rose 16.6% the agency said Tuesday.

    The government stated the hike in inflation in recent months has been higher than expected as providers of goods and services passed on increases in indirect taxes to consumers.

    International Monetary Fund and European Union officials monitoring the Greek economy have said inflation is expected at 4.75% this year, and 1.5 to 2% next year mainly due to higher taxes.