Seychelles October inflation slows to 25.6 pct y/y

VICTORIA (Reuters) - Seychelles' annual inflation rate fell to 25.6 percent in October from 29.3 percent in September, led by falls in the cost of oil and fats-based foods and dairy products, official data showed on Monday.

The prices of many food items on the heavily indebted Indian Ocean archipelago have dropped since inflation rocketed to a peak of 63.3 percent in December following reforms to liberalise the economy and record high oil prices.

"In October 2009, the All Items Index stood at 181.6 compared to 144.6 in October 2008. On a year on year comparison, this reflects a 25.6 percent increase in overall prices," the National Bureau of Statistics said on Monday.

Overall, consumer prices fell by 1.1 percent month-on-month, after a decrease of 0.5 percent in September.

The prices of oil and fats-based food stuffs dropped by 19.5 percent, while dairy products fell 5.4 percent. Bread and cereals were down 5.3 percent.

Fish prices bucked the trend and increased by 0.7 percent.

Earlier this month the International Monetary Fund said the Seychelles economy would contract 7.5 percent, less than an 8-9 percent fall predicted in August, and grow by 4 percent in 2010.

Best known as a retreat for tycoons and celebrities, the cash-strapped archipelago launched sweeping IMF-led reforms on its once state-controlled economy in November last year after defaulting on interest payments on $230 million worth of bonds.