Accuracy / Duration Inflation – The Champions of Appreciation

The recent data on inflation in Greece cause great concern, while some analysts estimate that this year it will move to higher levels than what the government expects. During the last four months (October 2023-January 2024), Greece found itself with inflation (3.8%, 2.9%, 3.7%, 3.2%) above the Eurozone average (2.9%) , 2.4%, 2.9%, 2.8%), which creates a negative base for this year, which – at least initially – is expected to be affected by developments with the Houthis in the Red Sea.

The effects on consumer prices are not yet clear, unlike the government’s responsibilities, which are apparent for not addressing the consequences of accuracy. While container rates may continue to rise in the short term, a big question remains how long the disruptions will last and when the passage will reopen for ships. In any case, food is a big “thorn”. It is typical that the inflation index for food, alcohol, tobacco stood at 7.1% for January, which shows that the situation remains particularly difficult.

Supermarkets made an additional 1 billion

However, the direct result is the reduction of the real income of the citizens, who have been asked to pay the broken ones by being left helpless by the government policy of the N.D. It is characteristic that the supermarkets presented an additional turnover of 1.077 billion euros in 2023, amid increased inflation and accuracy that hit consumers. At the same time, the government remained a spectator of the situation, while the measures it took are of doubtful effectiveness and will be implemented from next month, with the price increases continuing. According to Circana data, the sales value of the consumer products market reached 11.794 billion euros, compared to 10.717 billion euros in 2022, an increase of 10%. It is noted that of these sales, 9.180 billion euros concern the food category.

The champions of revaluations

The champions of price increases in 2023 are detergents and cleaners, with price increases reaching 11%. This is followed by cooking materials with price increases of 8.8% and snacks with price increases of 8%. The smallest price increases were recorded in alcoholic beverages (3.2%). For the three major categories of fast-moving consumer goods, the largest increases in sales value in 2023 were recorded by the category of household goods (detergents, cleaners, stationery, etc.) at +9.5%. In packaged food, the sales value increased by 9.3% and in personal hygiene and beauty products by 8.6%. At the same time, packaged food sales volume increased by 2.6%, personal care and beauty products by 2% and detergents/cleaners by 0.9%.

Accurate to 2025

In any case, an important “thorn” for Greece remains the explosive situation with accuracy. The BoE’s updated forecasts show that inflation will move on a lower trajectory (compared to before), but will remain above the limit set by the ECB. The preliminary estimate for 2023 remains at 4.3%, but inflation now looks set to fall to 3.5% in 2024 (2.6% in the 2024 budget) and to 2.2% in 2025, instead of 3 .8% and 2.3% respectively, as expected in the previous forecasts.

For inflation, the OECD says its decline will be slow due to wage pressures amid labor shortages. Specifically, based on Eurostat’s harmonized index of consumer prices, inflation is forecast to decline, from 4.3% at average levels this year, to 2.8% in 2024 and further to 2.4% in 2025.