CPI inflation eased down to 2.7% y/y in January, from 3.4% y/y in December, according to figures of the statistical office, published on Thursday. The main driver of the deceleration was the transport sector, where prices dropped by 2.8% y/y, consistent with moderating oil prices at international markets. In addition, alcohol and tobacco prices also slowed down slightly to 5.1% y/y, partially attributed to a base effect. Meanwhile, prices in the utility sector also decelerated slightly to 8.8% y/y, but remained solid overall.
To note, the government expects annual average inflation this year at 2.6%, down from 3.4% on average in 2018, mainly on the back of energy prices. On the other hand, consumer price growth should continue to be supported by the price growth of services, driven by rising wages.