Inflation in Greece Driven by Service Sector: Alpha Bank

Persistent inflation in Greece is driven by rising costs in the country’s service sector, which represents 80% of the harmonized index of consumer prices (HICP) for the first nine months of 2025, Alpha Bank notes.

In its weekly analysis, the Greek systemic bank stresses that inflation in Greece stands at an average of 3% compared to the 2.1% in the Eurozone over the same period, remaining at the same levels as in 2024.

Structural inflation, which does not measure fluctuating energy costs and food prices, settled at 3.9% compared to 2.4% in the Eurozone. This notable discrepancy reflects the conditions of excess demand against conditions of excess supply.

The main factors driving services inflation—and keeping inflationary pressures elevated—include:

• Strong demand, particularly external demand linked to tourism.
• Broad wage increases have had a stronger impact on service prices since the sector is more labor-intensive than others.
• Higher indirect taxes on food service and accommodation were introduced in the middle of last year.

There is also a technical factor: the increased weighting of services in Greece’s Harmonized Index of Consumer Prices (HICP). In 2025, services account for nearly 49% of Greece’s HICP—the third-highest share in the eurozone. This means that the rise in service prices recorded since the start of the year has had a stronger impact on overall inflation in Greece.

By contrast, the energy component of inflation made a slightly negative contribution during the first nine months of the year. This was partly due to falling oil and natural gas prices since April compared with the first quarter, as well as the weakening of the U.S. dollar against the euro.

The energy component plays a crucial role in easing inflation, as it is closely tied to broader geopolitical developments marked by high uncertainty.

As for market expectations, business sentiment in the industrial sector remains relatively stable—as do consumer expectations. Retailers’ expectations for price developments, however, are on a downward trend.