Deflation ‘is almost over’

GUERNSEY will move out of deflation by the end of the year, the States’ economist has predicted.
And inflation could jump to about 3.5% by June.
The Policy Council has released its first inflation outlook bulletin and Dr Andy Sloan has forecast that the island will soon move back into positive RPI after being in deflation since the start of the year.
He believes that RPI, reflecting the price of a ‘shopping basket’ of 2,000 everyday items, could stand at 0.9% when the fourth-quarter figure for 2009 is published.
‘This trend is likely to continue for at least two quarters as RPI “bounces back” from unprecedented negative rates,’ he said in the bulletin.
Dr Sloan (pictured) and his team predict RPI will then stabilise at about 3.7% for the remainder of 2010.
He acknowledged that the predictions were not an exact science. (from thisisguernsey)

mmm I somehow doubt that it will stay at 3.7%, I think it will more like 7% plus...

science = repeatable test results
economics = b****cks