The 12-month moving average inflation rate in December fell to 2.6 per cent from 2.8 per cent in November, the National Statistics Office said yesterday.

This means that Malta is well within the reference range of 2.9 per cent required for the country to be able to adopt the euro currency on 1 January 2008.

The reference value is calculated by taking the average of the three best performing countries plus 1.5 per cent. The average of the best performing countries in December was 1.4 per cent.

In December, the Harmonised Index of Consumer Prices fell, mainly on account of the food and non-alcoholic beverages and the restaurants and hotels indices, with the rate of inflation standing at 2.6 per cent, the National Statistics Office said yesterday.

In December 2006, the Harmonised Index of Consumer Prices went down by 0.1 per cent. This primarily reflected a fall of 1.2 per cent in the food and non-alcoholic beverages index, mainly due to fresh vegetables. A 0.5 per cent price reduction was registered in the restaurants and hotels index, mainly due to accommodation services.

The miscellaneous goods and services index was down marginally.

During December 2006, the clothing and footwear index rose by 1.6 per cent. The furniture, household equipment and routine maintenance of the house and the recreation and culture indices each increased by 0.5 per cent. These increases mirror price increases in package holidays, newspapers and furniture.

The transport index increased by 0.2 per cent. This was mainly caused by an increase in the price of motor cars and spare parts.

Other marginal increases were registered in alcohol, beverages and tobacco and health.