A former Government statistician has predicted 2009's inflation rate will be the lowest for three decades.

Cordell Riley, who is now managing director of Profiles Bermuda, said he believed inflation this year would be 1.8 percent - down from 4.8 percent in 2008 and 3.8 percent in 2007. It would be the lowest rate since 1976.

"In April of this year, we predicted that the annual inflation rate could be as low as 2.4 percent in 2009," he said.

"However, in light of monthly rates falling below predicted levels, we have revised our forecast."

Government's Department of Statistics has not released monthly inflation rates for November or December this year.

But Mr. Riley estimated that November's inflation rate will come in at 0.7 percent, the same rate as in October, and December's will more than double to 1.5 percent.

"Economists largely attribute the falling inflation rates to the falling price of oil, now at $79 a barrel and inching up to its year-high price of $82 a barrel," Mr. Riley said.

He said that lower inflation rates could also have a downward influence on interest rates. "Low interests rates are generally good for the economy and could trigger economic growth."

Currently, he said variable interest rates for mortgages could be obtained for as low as 5.75 percent, the same rate for secured educational loans.

Other personal loans start at 6.75 percent.

"Perhaps the major impact of low interest rates are on wages and rents. Typically workers' representatives seek wage increases somewhat above the rate of inflation. Given the forecasted rate of 1.8 percent, wage settlements are likely to be just above the two percent level," Mr. Riley predicted.

"Rent increases will likely go the same route.

"Consumers should also be putting their money in investments that yield more than 1.8 percent so that their money does not lose value."