Aim. Avgouleas in Proto: In Greece drastic measures must be taken to decisively reduce inflation (audio)

On the occasion of the report of the International Monetary Fund and what it includes in relation to inflation, but in any case also with what it says that the world economy is expected to experience another year of moderate growth, he spoke to First Program of Hellenic Radio 91.6 and 105.8on the show “Yes, But” and on Evangelia Baltatzis, where the guest was Emilios AvgouleasProfessor at the Law School of the University of Edinburgh and holder of the Interdisciplinary Chair of Banking Law and International Financial Markets.

As he characteristically stated at the beginning of his conversation with the journalist “the International Monetary Fund, which is usually very reserved, is slightly optimistic about the growth of the global economy, mainly for the developing markets of Asia. For Europe, he predicts anemic growth. But it predicts-and this is very encouraging-deflation first in developed countries and then in developing countries. And this de-escalation of inflation is predicted by taking into account the fact that the production chains that depend on China – China has opened up, its ports and industries are no longer closed due to covid, there is a liberalization in this particular regime. On the other hand, the purchasing power of citizens has decreased, so since citizens buy less and prices do not rise, supply increases, demand does not increase.”

Turning now to how this relates to global development, Mr. Avgouleas noted “the more the economy develops, the better the expectations of economic agents. Because interest rate hikes have made everyone very pessimistic. Also it must be said that on the Middle East front, neither Palestine nor Israel are countries that export oil or other sources of energy, such as natural gas. None of them are natural gas producers or oil exporters. The big shock, the big crisis in the energy markets came from the war in Ukraine, because there were a number of countries in the European Union, mainly Germany, that were completely dependent on Russian oil and natural gas. Of course, big steps are now being taken towards alternative energy sources, such as liquid hydrogen.”

“Greece has hyperinflation, galloping inflation due to weak spot checks on refiners and multinationals that control consumer products” pointed out Mr. Emilios Avgouleas at the end of the conversation with the journalist, noting at the same time the following “inflation is a kind of tax on the lower income strata but with the coupon it just boosts demand, which means more price increases. So the solution is to increase supply, production and that is why the country is in a phase of anemic development, because the economic model has not changed. That is, the economic model is still sun and sea, i.e. tourism. And if you look, most of the investments are mainly made with loans from Greek banks. More specifically, we finance investors to invest in Greece, while it should not be like this but the opposite. What is missing is serious and large-scale investment in the primary economy and agricultural production, because this would increase the supply of agricultural products and lower supermarket prices, at least for food and agricultural products. And unfortunately, the Reconstruction Fund money did not go to the primary economy, as it should have. OK, so there’s the Common Agricultural Policy, but that’s recent news. At the European level, inflation will decelerate but marginally, in Greece, however, drastic measures must be taken to decisively reduce inflation».