Greece: Inflation Reaches A Nine Year Peak

The consumer price index in August recorded an increase of 1.9% on an annualized basis, while it is expected to increase further.

The Greek Statistical Office (ELSTAT) announced Friday that Greece’s CPI rose in August to its highest level since April 2012, rising for the fourth straight month to reach 1.9% / month.

Its growth is mainly due to the increase in the cost of energy resources, from natural gas, the prices of which almost doubled over the year, to oil products, as well as food.

Now the question is what will happen in the coming months, as all estimates and data, starting with the cost of raw materials, energy and delivery, point to a new spike in inflation in the fall. This is due to the fact that part of the growth in prices for non-durable goods has already been repaid, and this cannot continue for a long time. Whereas in the case of durable goods, stocks purchased at low prices are about to be depleted, and new products will already be bought at a higher price.

Expected that electricity tariffs will rise by 50%while suppliers have informed retailers of upcoming price increases for a range of food items over the next few months. For example coffee price will grow by 1–3 euros per kilogram, and for pasta – in two stages. Further increases in sunflower oil and cheese prices are expected, with feta prices likely to rise by 15%.

In August, prices for most food categories rose, including lamb and goat (up 12.2%), fresh fish (8%), olive oil (7.1%) and mainly fresh vegetables (21 ,5%). Fuels and lubricants rose in price by 17.4%, air tickets – by 9%, and hotel prices – by 11.4%. By far the largest growth occurred in the natural gas sector, which grew 91% year on year *.

On the other hand, last month saw an annual decline in prices for wine (-4.7%), breakfast cereals (4.1%), clothing (2.6%), telephone services (2.5%) and durable goods. recreational use (2.4%).

On a monthly basis, food prices rose 1.1% and natural gas tariffs rose 10.2%. Fresh vegetables in August rose by 10.67% compared to July.

* The process of rising gas prices is rather related to the political situation around certification of the Nord Stream 2 gas pipelinethan with the economy. And it is quite possible that after its real launch, prices will fall.

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