Inflation highest since 1994

Inflation made a new leap in May to reach 11.3%, as price increases are continuing and now mainly concern the key aspects of the family budget, namely energy and food expenditure.

The price of gas has almost tripled compared to last year, while the 12.1% increase in food prices means a deterioration of living conditions, especially for the financially weakest households. Hikes concern the most basic foods – bread, milk, olive oil, meat, fruit, vegetables – and are high even on a monthly basis.

The inflation rate of 11.3% is the highest annual change for the month of May recorded since 1993 (16.4%). The last time any month had seen an 11.3% inflation was in 1994.

Given the persistence of oil rates at high levels – on Wednesday the average nationwide rate of gasoline was at 2.37 euros per liter and diesel was at €1.96/liter – and the increased cost of electricity for another six months at least, as estimated yesterday by the CEO of Hellenic Petroleum, as well as a series of raw material hikes, the summer is expected to be extremely difficult. For many, the summer holidays may turn into nothing but a midsummer night’s dream, given the very large increases in the prices of ferry and air tickets, fuel and accommodation.

The largest price increases on an annual basis were recorded in energy, per the Hellenic Statistical Authority (ELSTAT). The price of natural gas increased 172.7% compared to May 2021, electricity by 80.2%, heating oil by 65.6%, and fuel and lubricants by 36.6%. Notably, the calculation of the increases in energy was made after the various state subsidies had been taken into account.

In food it is the hikes in bread and cereals (13.4%) that stand out, which is largely related to the sharp rise in the price of flour after the Russian invasion of Ukraine, in dairy and eggs (14.1% ), in olive oil (23.2%), meat (13.8%), vegetables (13%) and coffee (6.3%).

Worse, there is hardly any hope of this trend reverting to normal anytime soon.