Greece is once again entering a period of expensive living. According to preliminary Eurostat estimates, in September inflation accelerated to 5.1% versus 3.7% in August. Main blow again goes through energy – gasoline, diesel, gas and electricity gradually transmit price increases to the entire economy.
Briefly about the main thing
- Inflation in Greece reached 5.1%;
- in the eurozone it amounted to 3.8%;
- energy remains the main source of price pressure;
- Labor productivity in Greece is only about 55% EU average;
- expensive energy is already being translated into prices for transport, products and services;
- If the oil market takes a serious hit again, the current 5.1% may not be the peak.
5.1% is already an alarming signal
According to the latest assessment Eurostatinflation in the eurozone rose to 3.8% versus 3.2% a month earlier. Energy showed the highest growth rate among the main components – 18.8% year to year.
For Greece, the situation is even more difficult: the national figure has risen to 5.1%, again significantly exceeding the European average.
This continues a trend that the Athens News noted back in the summer: even when overall inflation temporarily slowed, Greece still remained above the eurozone average. More details: “Inflation in Greece has slowed to 3.9%, but is still noticeably above the eurozone average.”.
The energy crisis did not start yesterday
The current surge cannot be explained solely by the events of the past few weeks. The European energy market has been restructuring for several years now.
After 2022, the EU sharply reduced purchases of Russian oil and gas and introduced sanctions against Russian companies, ships and individual energy transportation schemes. The European Commission views this policy as reducing strategic dependence on Russia.
At the same time, Russia redirected a significant part of its exports to China, India and other Asian markets. As a result, Europe has become more dependent on the global LNG market, offshore oil supplies and longer supply chains.
This restructuring does not necessarily lead to a crisis in itself, but makes the European market more sensitive to new external shocks.
Then came a new oil shock
The consequences of the sanctions restructuring were added to by the war around Iran, problems with routes through the Middle East and rising world prices for petroleum products.
At the same time, attacks by Ukrainian drones on Russian refineries and oil infrastructure periodically limit Russia’s ability to export diesel and other petroleum products.
When at the same time part of the Russian supply is reduced, problems arise in the Middle East, and European refineries are operating almost at capacity, the market quickly becomes scarce.
It is this mechanism that has already been clearly visible at Greek gas stations. The Athens News showed in detail how the average price of gasoline first settled above €2.10, then rose to €2.16 and continued to rise. More details: “Fuel prices are rising in Greece: gasoline is already €2.16 per liter, diesel €2.14”.
Electricity also hit the budget
The problem is not limited to gasoline. In September, the wholesale price of electricity in Greece rose higher €200 per MWhand diesel in Athens on some days was already more expensive than regular gasoline.
“Athens News” wrote more about this in the material “Energoshock: electricity €212/MWh, diesel is already more expensive than gasoline”.
The energy increase then begins to spread further: the carrier pays more for diesel, the manufacturer pays more for electricity and raw materials, the store pays more for delivery and refrigeration. Ultimately, this chain appears on the price tag for the buyer.
Products are already starting to become more expensive
This transition is already becoming noticeable. From October 1, prices for dairy products, feta, bread and other goods began to rise in Greece, and the imported energy component previously increased much faster than the general price level.
More details: “A new wave of price increases is beginning in Greece: what products will prices increase?”.
Previously, Athens News already looked at which categories usually begin to rise in price following gasoline and electricity: transport, delivery, bread, cafes, restaurants and products with a high share of logistics. Cm.: “After gasoline and electricity: what will rise in price next in Greece”.
But Greece’s problem is deeper than energy
The external crisis is superimposed on an old internal weakness – low economic productivity.
In the report European Commission for Greece 2026 it is explicitly stated that labor productivity in the country is only about 55% EU average.
This means that the economy creates relatively little added value per hour of work and has a harder time absorbing rising costs of energy and imported raw materials.
We have already discussed this structural problem in detail in the material “Growth on paper and stagnation in reality: what the indicators of the Greek economy hide”.
What happens next
The most likely scenario for the coming months is that energy costs and inflation will remain higher than previous forecasts.
If the situation around the Middle East stabilizes, strategic reserves will help the market, and supplies of petroleum products increase, the pressure on prices will gradually ease.
But with a new aggravation around Iran, problems with Hormuz, new attacks on oil refining infrastructure, or additional restrictions on fuel exports, another jump is possible.
Then the increase in the cost of gasoline and electricity will again turn into transportation, products, services and daily family expenses.
Editorial commentary from the Athens News. The Greek economy continues to grow, but beautiful GDP figures are not enough if productivity remains low, energy is imported at a high price, and every international crisis quickly appears on the gas station and on the electricity bill. September’s 5.1% may not be the top of a new wave, but only the first serious warning.
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