Greek inflation strikes back
Fuel and food rates grew in July, ending the decline of the harmonized consumer price index
Eurostat’s provisional data on the harmonized consumer price index on Monday showed a rebound in inflation in Greece in July instead of a further de-escalation. Such data are worrying both for their effects on family budgets and overall for the course of the economy’s development. Food inflation remains high, while unleaded gasoline is creeping back up to an average rate of 2 euros per liter across Greece.
The continuation of the price hikes in basic commodities, such as food and fuel, but now also in several categories of services, is creating pressure on the government and by extension on the state budget through a further extension of various income support measures. It is noted that the Market Pass has already been extended until October, while the Household Basket measures and the ceiling on the gross profit margin for basic items have been extended until the end of 2023.
According to the data announced on Monday by Eurostat, European Union-harmonized inflation in Greece was 3.4% in July from 2.8% in June, snapping a nine-month losing streak. This development contrasts with what happened in the eurozone, where the harmonized rate continued to decelerate and was estimated at 5.3% in July from 5.5% in June.
August vacationers will be asked to pay even more for their car journeys, as in recent days the price of petrol has been on a steady rise. The average price of unleaded increased in July by 4.25%. According to data compiled by the Fuel Price Observatory, the average nationwide price of unleaded gasoline on July 30 was €1.942/liter from €1.896/liter a week before and from €1.863/liter on July 1.
It should be noted that along with Greece, an increase in inflation in July is observed in three more eurozone member-states: Spain (2.1% from 1.6%), Luxembourg (2% from 1%) and Finland (4 .2% from 4.1%). On the eurozone level, food inflation stood at 10.8% in July from 11.6% in June, while an increase was recorded in the prices of services (5.6% in July from 5.4% in June).
Although the data on the consumer price index in Greece in July will be announced by ELSTAT in a week, all indications point to the source of the problem lying in the prices of food and other supermarket staples and the prices of some services.
