It is expected that inflation will remain at high levels in the coming months, mainly because of the sharp increase in imported inflation, but will gradually decline thereafter. According to Bank of Greece projections compiled at the beginning of the year and published in February, average annual inflation in 2008 was expected to be 3.4%.
However, certain risks then highlighted now seem to have materialised, mainly as regards developments in oil prices internationally and unit  2  BIS Review 53/2008  labour costs domestically; hence, average inflation will be higher than initially projected and is expected to be around 4%.