About one in four businesses in Greece (23.6%) raised their prices in the first half of the year, while 22.2% said they would also raise their prices in the coming months, according to a biennial survey by the Small Business Institute. , Greek Confederation of Professionals, Craftsmen and Traders (IME GSEVEE).
The results show that the authorities, despite the bold statements of officials, will not be able to contain the expected rise in prices. At the same time, owners of 42.4% of small and medium-sized enterprises say that they have liquidity only for the next month or so, and another 21.4% admit that their money turnover tends to zero.
These phenomena form a vicious circle: lack of liquidity prevents the absorption of increased prices – in some cases, this shortage is a pretext for price increases – which then fall on the final buyer. This could lead to a drop in demand, further exacerbating the corporate liquidity problem.
The aforementioned figures for businesses that have already raised or will raise prices represent a record figure from the IME GSEVEE study. “The rise in prices is a harbinger of inflationary pressures that will affect all sectors of the economy,” comments the federation. “This pressure, coupled with a possible recessionary trend as a result of the spread of the pandemic, carries the risk of stagflation, a phenomenon that began in 1973 and weighed down the Greek economy for nearly a decade. Therefore, how to deal with price increases will be critical, ”added GSEVEE.
The fact that the pandemic continues with the emergence of new strains, against the backdrop of declining daily vaccination rates, and the technological shortcomings of small businesses compared to their larger or digital counterparts, are calling into question the resilience of many small and medium-sized businesses. According to the same survey, 36.7% of entrepreneurs expressed fears that they may have to terminate their activities in the next few months.
The data on enterprises that were suspended at the request of the authorities in connection with measures to protect against coronavirus are even more gloomy: the majority (50.9%) express fears that they will close in the near future, while in the catering sector this figure is 48.5%.
The crisis that was predicted after the start of the pandemic has already come …