Inflation at an 11-year high

The Greek consumer price index has topped 5% for the first time since January 2011, as in December it reached 5.1% on an annual basis, the Hellenic Statistical Authority (ELSTAT) confirmed on Thursday.

Hikes are not only to be found among energy commodities and some foods, but are obvious across all categories of products and services, from natural gas and heating oil to pasta and ready meals.

For 2021 as a whole, inflation came to 1.2%, the highest annual level since 2012, when it had stood at 1.5%.

Households, corporations and the government are not only worried about energy rate hikes but also basic food items such as bread, pasta, potatoes, fruit, vegetables, meat and cheese. Price rises eat into disposable incomes, resulting in the reduction of inflexible expenditure (that for food), while demand is clearly lower in the rest of retail too, despite the ongoing winter sales.

Stocks of products and raw materials purchased and stored before the onset of the energy hikes have now almost run out and the price increases of new imports are being passed on to consumers – albeit partly – who have to pay for the rise in production costs.

Natural gas was the leader in hikes, with an increase of 135% from December 2020, while the cost of electricity rose 45% year-on-year and that of heating oil climbed 34.1%. Still, natural gas recorded a small decline compared to November.

The prices of essential food commodities leapt last month, with olive oil rising 17%, potatoes up 14.2%, pasta prices growing 7.6% and fish costing 6.7% more. There were also remarkable hikes in cheese, fruit and vegetables (5.5%), in poultry (6.6%) and even bread (4.9%).

Worse still, supermarkets have received new price lists from their suppliers that point to continued hikes in the coming weeks and months. Retail chains argue that energy costs are particularly high, rendering it impossible for them to absorb the hikes from the suppliers, which are also to be found in private-label products.