Signs of continued inflation

By Tasos Dasopoulos

Continuation of the upward trend of inflation is predicted by three precursor indicators that reflect the fluctuation in the imported raw materials and fuels, the prices of domestic industrial products and the prices of primary production products, from the field and the livestock units.

The most up-to-date, which includes April data, is the producer index in industry, which records the fluctuation of the prices of industrial products produced in Greece. The index, which incorporates in addition to increases in raw materials and fuel, had an annual increase of a record 48.8% for April, compared to the same month of 2021.

In particular, according to the data of ELSTAT, in the sub-categories, the production prices of final petroleum products record for April an increase of 100.1%, in the production of electricity 89.4%, in the manufacture of metal objects 15.4% and in the production of basic metals 12%. This is one of the precursors to inflation, as industrial products end up in retail with a delay of 1-2 months, depending on the type and stocks.

A second corresponding indicator is that of import prices in industry. This indicator records the change in import prices from quarry-mines (ie raw materials). but also crude oil and gas prices. The index of industrial import prices for March increased by 34.6% compared to the same month of 2021. In the sub-categories, the largest increases are recorded in the production of final petroleum products by 96.7%, oil extraction (ie. the price of imported crude) by 77.7% and the production of basic metals by 33.1%.

The third, equally characteristic indicator, is that of output inputs in agriculture and livestock. In terms of outflows from agriculture and livestock, ie wholesale prices for meat, milk, eggs, but also fresh fruits and vegetables from production sites. The output index for March had a significant increase of 19.7% The overall increase of the primary production price index was formed by the increase of 22.6% in the products of plant origin (fresh fruits and vegetables) and by 15.6% in the products animal production. These increases are due to increases in fertilizer prices by 57.2%, fuel by 53.2% and feed by 24.2%.

Double digit and the harmonized CPC

The harmonized index of consumer prices in Greece, which Eurostat will announce as a forecast today, is expected to be in double digits, after the 9.1% announced for April, mainly due to the continuing price increases in energy products and food.

The speed with which prices have risen in Greece is shown by the annual Eurostat data, based on which, a year ago, in May 2021, the harmonized index of consumer prices for Greece was only 0.1% after about 10 years of negative inflation.

Meanwhile, the national consumer price index has reached 10.2% since April and for May is expected to move higher, breaking perhaps the 11% barrier.

The continuous increases in prices reflected in inflation are expected to further increase the pressure for measures to curb the wave of accuracy. The financial staff will continue to be under pressure until June, when the major intervention of 3.2 billion euros in electricity tariffs will begin to be implemented, which is expected to eliminate the adjustment clause, covering retrospectively part of the consumer losses since last December.