Inflation soars in November – What ELSTAT will announce

By Tasos Dasopoulos

The “difficult winter” that the Ministry of Finance has been waiting for on the inflation front officially begins, with the increases in gas, electricity and oil prices passing to retail prices, causing increases in all products and services.

According to information, the new rise of just under 5% expected for November in the national consumer price index will be a result of the continuous price increases, mainly of electricity and gas and secondarily of oil, September and part of the October price increases. . By the same token, a new rise is expected in December, as the price hikes of the second half of October and November will appear. Even the slight stabilization that appears from the beginning of the month, with oil at $ 75 a barrel and gas at 95 euros per kilowatt hour, is considered a “wait-and-see” until new data is available to reshape the new trend. in prices.

Now, the “hard core” ministers of the financial staff have abandoned the scenario for stabilization and partial de-escalation of prices after the end of the first quarter of next year. They speak openly about price stabilization, even at high levels at some point, in the second quarter of 2022.

The relative composure they show is due to the fact that inflation is largely imported and, so far, macroeconomically neutral. This is given that high inflation flights do not particularly affect the Gross Domestic Product as the GDP deflator is zero for this year and 0.2% for 2022 and 2023.

Budgetically, although the amount of measures to curb accuracy has reached 620 million euros, the budget burden is limited to doubling the heating allowance from 84 million euros to 168 million euros in winter 2021-2022. The money given as a subsidy for gas and electricity comes from pollution rights auctions, which do not add up to public revenue. That is why both the Minister of Finance, Christos Staikouras, and the Minister of Energy, Costas Skrekas, assure at every opportunity that the support against the wave of accuracy will continue, for as long as necessary.

An additional element of optimism is that in terms of a harmonized index of consumer prices, ie inflation comparing Greece with other European countries, Greece is still very low. Specifically, based on Eurostat forecasts for November, Greece with 4.3% was in 13th place in terms of inflation, while the average inflation within the Eurozone was at 4.9%.

The Christmas turnover

Estimates want inflation to peak at the end of December, when we will have a turnover of 6-7 billion euros for the holiday season, with consumption fueled by the Christmas gift to the private sector, while prices will continue to grow.

The most serious concern is the loss of income caused by inflation, especially for the financially vulnerable. In this direction, the 250 euro allowance was introduced for the 800,000 low-income pensioners and the 170,000 disabled, along with the half-salary bonus for the health workers.

With the exception of health workers, the other two categories were considered to have no extra help during the pandemic months, as they did not have any income losses. The so-called “middle class” will have to profit from subsidies in electricity and gas. For the rest of the revaluations, based on the data of the Bank of Greece, it has the deposit stock of 23 billion euros that was collected during the months of the pandemic.