Inflation remains at a high level in Greece, while in the Eurozone it is starting to “sting” upwards.
In particular, inflation in Greece rose to 11.1% for August 2022, according to Eurostat’s preliminary data.
In the eurozone, average inflation is estimated at 9.1% in August 2022, up from 8.9% in July, according to the European Statistics Office.
Looking at the main components of inflation in the euro area, energy is expected to have the highest annual rate in August (38.3%, compared to 39.6% in July), followed by food, alcohol and tobacco (10.6 %, against 9.8% in July), energy industrial goods (5.0%, against 4.5% in July) and services (3.8%, against 3.7% in July).
Minimal slowdown and predictions
Regarding Greece, it is recalled that according to ELSTAT, annual inflation was 11.6% in July, slowing down from 12.1% in June, while according to Eurostat (harmonized index) it had reached 11.5 % in the same month, slowing slightly from June’s 11.6%.
Based on the summer forecasts for Greece, the European Commission estimates that in 2022 inflation will reach 8.9%, from the 6.3% it predicted in the spring, to start declining gradually in 2023 and reach 3, 5% next year, against a forecast of 1.9% in May. In addition to maintaining high inflation, weakening momentum in job creation, especially due to the weaker recovery, is expected to act as a brake on household spending in the coming quarters, as reported by the Commission.
According to the Central Bank, inflation, based on the harmonized index of consumer prices, is expected to reach 7.6% in 2022, mainly due to the upward trend of energy goods, but also the revaluation of food items, while it will decelerate in 2023 and further in 2024. Core inflation will also be high in 2022 and, while decelerating in 2023 and 2024, will remain relatively high, even exceeding the headline rate, due to the gradual incorporation of the strong inflationary pressures of 2022 into the core.
The eurozone will soon be in double digits
Beyond that, a further uptick in the eurozone seems set to take place, with some analysts calling for a rise of more than 10% by autumn. At historically high levels of almost 50 years, close to 8%, the price index was found in Germany, while in Spain it reached 10.3%.
In France, Europe’s second largest after Germany, inflation slowed to 6.5% from 6.8%, while in Italy, the third largest, it increased to 9% from 8.4%.
Estonia (25.2%), Lithuania (21.1%), Latvia (20.8%), Netherlands (13.6%), Slovakia (13.3%), Slovenia (11 .5%), Belgium (10.5%) and Spain (10.3%).
Notably, in Germany, consumer prices jumped to 8.8% year-on-year by EU harmonized standards, up from 8.5% in July, a nearly fifty-year high. On a monthly basis, the increase was 0.3%.
Respectively, the prices of fuel and household energy increased by 35.6% on an annual basis, remaining almost at the same levels as in July. Food prices made a difference, as price appreciations escalated, taking the increase to 16.6% from 14.8% last month.
Analysts were quick to comment that this increase came despite measures launched by the government to relieve households and contain inflation, such as a reduction in fuel tax and cheap public transport tickets.