Inflation soared in December

By Tasos Dasopoulos

The “rally” of international prices in energy products and the relatively greater dependence of Greece on fossil fuels, is expected to shape the national consumer price index for December above 5%.

Eurostat announced on Friday the harmonized index of consumer prices for December, for all Eurozone member states and for Greece.

In our country, the European index increased to 4.4% in December from 4% in November. The harmonized index for comparability reasons has lower weighting in fuels and seasonal products and unprocessed foods.

As is well known, Greece is relatively more dependent on fossil fuels (it even contains lignite in its energy mix). Consequently, electricity producers are forced to pay high emission charges to use lignite and, at the same time, a high price to use natural gas as fuel. The result was that for most of December the final electricity prices were among the highest in Europe.

This difference in the energy costs of Greece in relation to the rest of the Eurozone countries is the main reason for the growing deviation of the measurement, the national consumer price index from the harmonized index of consumer prices from September onwards, when the prices of energy products have become a concern at European Union level.

Thus, for September, the HICP for Greece was 2.2%, while the harmonized index was 1.9%. In October, the national consumer price index rose to 3.4%, while the harmonized consumer price index to 2.8%.

In November, the national consumer price index rose more to 4.8%, while the harmonized index for the same month is 4%.

The increases, however, are not limited to fuel, but have begun to affect the entire Consumer Price Index basket.

In particular, for November there was an increase of 21.3% in the price of lamb and goat meat, 18.5% in olive oil, 16.7% in other edible oils, 11.9% in the price of potatoes, 9.8% in fresh fish 6.1% in meat preparations, 5.6% in poultry, 4.3% in bread prices, 3.9% in coffee prices, 3.8% in the price of chocolate and chocolate products 3, 9% in pasta, 3.5% in cheese 1.5% in beef, 2.4% in other bakery and confectionery products 2.5% in fresh vegetables and 0.4% in fresh fruit.

The only foods that had a 1.8% reduction in price were wines.

Inflationary pressures continue

The bad thing is that the price pressures will continue in the coming months, as the decline in energy prices in the last days of December is considered cyclical.

The biggest risk is that the increase in production costs that we have had all the previous months from the price increases in energy products have only been partially passed on to retail prices. Market executives point out with meaning that even the big increases will start to appear in the coming months.

The subsidies on gas and electricity bills of 400 million euros announced on Friday, aspire to curb not only the direct burden on household energy bills but also the cost of production to businesses. How successful the measure will be will be seen in the coming difficult months.