Annual CPI inflation retreated further to 0.6% in Jun-23 from 1.5% inflation in previous month. This decline was primarily attributed to reduced inflation of mixed goods (-6.8% y/y) and imported goods (-5.9% y/y).
Additionally, domestic goods inflation continued its downward trend, with a rate of 8.5% y/y in June compared to 9.1% y/y in May. Meanwhile, core inflation (non-food, non-energy, non-tobacco) increased slightly to 4.0% (+0.1ppts m/m) in June.
By categories, annual inflation was mostly driven by price changes in transport (-11.6% y/y, -1.45ppts), healthcare (-6.9% y/y, -0.67ppts), alcoholic beverages and tobacco (+7.4% y/y, +0.50ppts), utilities (+4.5% y/y, 0.46ppts), and restaurants and hotels (+10.2% y/y, 0.37ppts). On a monthly basis, there was a 0.7% deflation in Jun-23, driven by price reduction in food and non-alcoholic beverages (-3.2% y/y, -1.08ppts) category.
Given the ongoing disinflation trend, we expect NBG to cut the rate by 50bps on 2 August 2023 meeting.
