ATHENS – Piling on the bad economic news for the New Democracy government a year ahead of elections, Greece’s annual consumer inflation soared to its highest level since 1994, inflation reaching 10.2 percent over rising costs for energy, housing, transportation and foods.
That was shown in the official data from the country’s statistics agency ELSTAT, said Reuters, reporting that price growth was 8.9 percent in March and that the annual European Union-harmonized inflation also rose sharply to 9.1% in April from 8.0 percent in March, reaching 10.2 percent overall.
% in March, further squeezing disposable incomes.
EU-harmonized inflation is an index of components used across the EU to measure inflation in a consistent way. Natural gas prices soared 122.6 percent on an annual basis, while electricity prices increased 88.8 percent, hitting customers where they live and leaving the government scrambling to contain the hikes and offer subsidies for households.
The cost of housing rose 35.2 percent year-on-year, transportation prices were up 15.4 percent with foods and non-alcoholic beverages 10.9 percent more expensive, the data showed but despite the news the government still hasn’t moved to cut the 24 percent Value Added Tax (VAT) on food.
Despite that, even during the lingering COVID-19 pandemic, the economy is expected to grow 2.9 percent this year and 3.5 percent in 2023 after being hammered during the lockdown years of 2020 and 2021.
Greece is being helped by increased disbursement of funds from the European Union’s Recovery and Resilience Facility, the EBRD projected, some 32 billion euros ($33.79 billion) in loans and grants unaccounted for.
The EBRD said Russia’s invasion of Ukraine not so much through direct links but indirectly via increased energy costs given its high dependence on energy imports, the news agency said.
Other headwinds include supply chain disruptions, rising costs of financing and possibly lower-than-expected tourist arrivals should a recession take hold in major western European countries, the EBRD said.
Greece’s economy started a comeback in 2021 on the back of more tourist arrivals and the Gross Domestic Product (GDP) rose 8.3 percent, also aided by increased foreign investment and growing consumption.
The EBRD’s investments in Greece amounted to 838 million euros ($884.76 million) in 2021, making the country one of its top five funding recipients.