Inflation in Greece: Slumping energy rates; continuous hikes in food prices

Although the annual inflation rate in Greece continued ease last month, May 2023, certain cost-of-living indexes remained high, especially food prices, which recorded a higher rate than other sectors.

Overall, the inflation rate in Greece eased to 4.1 percent in May, according to Eurostat, lower than most other countries in the EU and Eurozone. The flattened inflation rate was mostly due to collapsing energy prices.

In fact, Greece sported the second most pronounced reduction in energy prices amongst the 12 Eurozone members for which figures are available. Specifically, energy prices decreased by 21.1 percent on an annual basis. Belgium led the pack with a 32.5-percent reduction.

According to the weekly economic bulletin by Greek systemic lender Alpha Bank, one of the reasons that Greece is experiencing milder inflation pressures at present is that after February 2023 the harmonized consumer price index, which includes energy products, fell by 5.8 percent, 14.7 percent and 18 percent, respectively, between February 2023 and April 2023. The latter development is partially attributed to base effects.

Conversely, a dramatic increase in energy prices in Greece began in early 2022, compared to the Eurozone, 56 percent compared to 40 percent on an annual basis, on average, something witnessed between March 2022 and September 2022.

At the same time, however, food prices continued to record higher cost hikes, compared to the overall inflation rate.

Greece’s statistics authority (EL.STAT) is expected to announce its own inflation figures for the previous month, May 2023, on June 9, revealing whether food prices have finally dropped to single digit “territory” or whether they will again have posted double-digit inflation for a 14th consecutive month.