Family budgets are burning and from the threat of a generalized wave of price increases that is beginning to be felt in the Greek market. The rally that has been recorded for a few months now in raw materials and transportation costs worldwide is “knocking” at Greece’s door, with the first major price increases having already appeared in a wide range of products, from food and consumer goods to building materials and animal feed (up to 40%).
The phenomenon is expected to intensify over the next period as information indicates that significant price increases have been launched that will be reflected directly on the shelves of supermarkets. Pork (up 17%), imported cheeses, oils (of all kinds over 5%), legumes (up to 8%), sugar, baby milk, mayonnaise, baby care items (over 6%), air fresheners and many more products are getting ready to climb, further straining family budgets.
Similar pressures are being exerted on other categories, with experts and analysts worried about how things might turn out, as suppliers’ resilience to absorbing the extra costs is limited. Indicative is the case of fertilizers, which have already risen between 20% and 30%. Traders in the industry say they are receiving messages from major suppliers that prices are not expected to fall below these levels for the rest of this year. The upward trend is also recorded in the indices of the Hellenic Statistical Service (ELSTAT), such as the indices of output prices of agricultural production, ie the selling prices of products. For example, the crop production index increased in March by 6.1% compared to 2020 and the livestock production index by 0.6% compared to 2020.
The issue is being closely monitored by the government, with competent sources not hiding their concerns about imported inflation and how it could affect the recovery of the Greek economy. A generalized precision can act as a deterrent to the reheating of consumption, which is a key issue for the Greek economy to move forward in the post-Covid era.
“We do what we can”
Businesses, on the other hand, seem to be trying their best to keep prices down and prevent any passing on to the end consumer. Which is not always easy as it depends on the burden they incur. There is great concern about where this situation will lead… The alarms are being rung by the heads of large food and catering industries, who point out that there are upward trends throughout the production chain, from milk and nitrogen to packaging materials and plastic.
The business community insists that a de-escalation of taxation could provide a solution to the problem that is starting to emerge. The reduction of VAT is estimated to lead to a restraint of prices, while leading to a stimulus to demand and consequently to a strengthening of public revenues. It is something that, as people in the market say, has worked in the past and can prove to be functional now.
Latest News
BoG: Feb. Current Account Deficit up by 1.8bln
At current prices, exports dropped by 10.3% (‑10.7% at constant prices) and imports grew by 5.7% (9.4% at constant prices).
Greece Becoming a ‘Refuge’ for German Pensioners
The government's policies to attract foreign property buyers to boot the economy is working, reports German newspaper Handelsblatt
Iran Activates Air Defense System- Reports of Attack by Israel
An Iranian official said explosions reported by Iran's media were the result of the activation of the country's air defense system, yet media reports attribute them to a drone attack by Israel
Poll: Greeks, EU Citizens Eager to Vote in European Elections
EU citizens are eager to vote in the upcoming elections for the European Parliament in June, with eight in 10 saying the current geopolitical situation makes voting imperative
Mitsotakis-Erdogan Meeting in Ankara Fixed for May 13
The Greek PM himself made the announcement from Brussels on Thursday, while he also responded to a question on Athens' intent to create a marine park in the central Aegean, an environmental initiative
Greece Aims to Boost Energy Capacity, Economy with Offshore Wind Farms
Greece’s Energy Ministry is pushing legislation to accelerate the construction of the first floating wind farms in Greek seas
Reuters: Greek Economy Surges After Decade of Pain
Nevertheless, the article also highlights some of the challenges facing the country, with a falling birthrate and labor shortages posing a threat to the long-term outlook
IMF: Greek Growth in 2024 at 2%; Debt to Ease to 158.8% of GDP This Year
Projected consumer prices are forecast to rise by 2.7%
Major Increase in Russian Natgas Imports by Greece in 1Q 2024
Russian state natgas exporter Gazprom dominated imports to the country, mostly through the overland pipeline entering via a northern frontier pipeline
Lamda Development Announces First Profitable Year for The Ellinikon Project
The ATHEX-listed developer reported 206 million euros in EBITDA for FY23, a 69%-percent increase from 2022 results