Inflation in Greece: Concerns about April rise

Even 2-digit inflation rate in April may become a sign that inflation in Greece continues with increasing intensity.

It is recalled that the general consumer price index rose in March by 8.9%, while all data show that there will be a new upward trend for the current month.

It is characteristic that the price of electricity continued its upward trend in April along with the price of gas.

The continuation of the war in Ukraine and the attitude of Russia regarding the cessation or not of their gas flow led to new price increases.

In fact, yesterday Russia implemented the decree issued at the end of March by Vladimir Putin, which states that if unfriendly countries do not pay for gas in rubles, then the supply will be cut off. This happened yesterday with Bulgaria and Poland, while in a few days it will be Germany’s turn to pay for Russian gas, something that may lead to new developments. Regarding Greece, the next payments to Gazprom will be made on the last 10 days of May, as pointed out yesterday by the government, after a meeting held under Prime Minister Kyriakos Mitsotakis.

The rise in prices during Easter

From there, during the Easter holidays, there was a series of price increases. Food chains “raised” their stocks for the holidays with products at a higher price.

At the same time, the big flight towards the countryside during the Easter holidays brought a big increase in fuel consumption and even at a higher price, as gas stations in local regions of the mainland, but also on islands sell at higher prices compared to urban centers.

At the same time, the prices of ferry tickets are now higher compared to last year and compared to a month ago, as well as the prices in hotels across the country.

Based on all the above data, a new rise in inflation for the current month is expected, without anyone being able to rule out a 2-digit percentage, when the announcements will be made by ELSTAT on May 10, 2022. It is worth noting that in 1994 there was a double-digit percentage inflation at 10.7%.

Goal revision and bleak forecasts

In any case, the government has already revised its 2022 annual inflation forecast, which is expected to be recorded in the Medium Term Fiscal Strategy Framework, which is expected to be submitted to the Commission on 30 April. According to information, the percentage now predicted by the government’s financial staff is in the range of 5.5% -6%.

However, more “dark” assessments have seen the “light” of publicity. In the basic scenario of the BoG, inflation is at 5.2% and in the case of an  unfavorable scenario at 7%, while the IMF “sees” inflation of 4.5%.

It is noted that increases for 2022 have been recorded even up to 11%. According to the Parliamentary Budget Office, in the basic scenario, inflation will rise to 6.99% in 2022 and growth to 3.58%. Under the mild scenario, growth will reach 2.75% and inflation will stand at 7.43%. In the extreme scenario, growth reaches 2.21% and inflation 11.01%.