Inflation finally slows down
Signs of a long-term easing of price rises, as EU harmonized index drops to 9% in November
Inflation in Greece slowed to 9% in November, from 9.4% in October according to the provisional data on the European Union harmonized index Eurostat released on Wednesday, while a National Bank study projects a further decline in the months to come.
The Greek index remained well below the eurozone average of 10% in November, which also declined from 10.6% in October, Eurostat said.
The National Bank study generally discerns signs of deceleration and forecasts that the consumer price index will average at 4.5% in 2023 (against a mean rate of 10% for 2022) against a government projection for 5%.
“Inflation in Greece has passed its peak point and is expected to decline to 3% by the end of 2023, from about 8% at end-2022, with a chance of a further decline if the improvement in the international energy and raw materials markets continues,” argue the National Bank analysts, headed by chief economist Nikos Magginas.
The key to that decline belongs to energy rates, which continued to fall in November and are expected to continue doing so for the coming months too. “The inflation slowdown in Greece mainly reflects the reduction in natural gas rates, with the recent energy market forecasts allowing for some reserved optimism for avoiding the worst-case scenarios for this winter, and for a further decline in energy prices in 2023,” notes the analysis.
The NBG economists also note the role the increased state subsidies and customer discounts have played in containing inflation: The contribution of gas to inflation in October amounted to just 0.6 percentage points, down from 2.5 percentage points in September.
On the other hand, the price rally in food continued, as the average rise amounted to 14.8% in October, per the NBG report. Even so, international developments also point to a deceleration, the analysts add, with the improvement on that front anticipated from the end of next year’s second quarter: The analysts estimate that food inflation will average at 6% year-on-year in 2023, and ease to 1.7% in December 2023.
