ELSTAT makes announcements on Friday, November 10, about the course of inflation in October, with estimates pointing to a new rise, especially in the food sector.
Eurostat has already predicted the picture, based on which it records for October a rise in the food-alcoholic index by 2.2% in one month, when it rose marginally (0.2%) in the Eurozone as a whole. Especially in the prices of fresh products, due to the climatic situation, increases are expected to be recorded, both compared to the previous month, and in relation to last year, where of course the bar was high (with 14% food “ran” in October 2022).
After all, in fruits and vegetables, at the wholesale level, based on the price list of the OKAA, since yesterday there have already been increases in prices that reach 15% for cucumbers, 10% for zucchini, 33% for carrots, 83% for cauliflower , 55% in onions, 25% in broccoli, 19% in potatoes, 38% in oranges, 44% in grapes.
In relation to energy prices, which have significant weight, there has been a de-escalation trend in natural gas and oil in recent days, however the environment is unstable. However, on a monthly basis, natural gas prices in the TTF index recorded a decrease of 2.68%. However, yesterday, a “shake” in the price was recorded, of approximately 5%, at 48 euros/MWh. Brent is moving at 80 dollars/barrel, with a monthly drop of 5.53%. Of course, the heating oil, which has started to be available, is expected to leave its mark on the energy index, as is electricity. However, compared to last year, the electricity picture is better, while compared to September, the prices are slightly higher, based on the providers’ announcements.
It is worth noting, however, that based on the latest IELKA research, the climate factor has a decisive influence on prices. As reported, 82% of the public say that natural disasters generally affect product prices with only 2% disagreeing. In fact, 39% consider that the effect is great. This shows that not only basic products such as fresh food, but products in general are affected by climate change.
Product prices are the main area where problems are found, but not only. Specifically to the question of whether the recent floods in Thessaly will affect various factors in relation to market supply:
• 97% think that the recent floods in Thessaly will affect product prices (73% a lot).
• 95% think they will affect the costs of food producers (68% think a lot).
• 80% believe they will affect market supply times (32% a lot). Of course, it should be clarified that until now the fears have not been confirmed, neither in relation to prices, nor in relation to the supply of the market, since either by the production of the rest of the country, or by other tools, both the adequacy and the product prices at summer 2023 levels.
Fines and reductions
In the meantime, with fines and an emphasis on the “permanent price reduction” initiative, the government is trying to “defend itself” in order to politically and financially manage the whole issue. 650 products from 53 companies have joined the initiative. The next goal is 1,000 products that cover the basic needs of a household.
This was noted by the Minister of Development Kostas Skrekas during his visit to a supermarket in Galatsi yesterday.
The minister emphasized that the permanent price reduction tags are those that indicate that the corresponding product belongs to the program and has reduced its price by at least 5% and for at least 6 months.
At the same time, Mr. Skrekas added that “the battle for the reduction of prices continues on three axes:
Continuous and intensive checks on the market, at all stages of the supply chain to prevent the phenomenon of profiteering
“Permanent Price Reduction” initiative, where we ask suppliers to permanently and permanently reduce the price of their products
and the “household basket” that continues and the consumer can find products with the lowest prices to meet daily needs”.
The international trend
Meanwhile, a soft landing and a gradual decline in inflation, but not an immediate return to normal levels, is forecast by the International Monetary Fund (IMF) for Europe’s economy, ruling out the possibility of a collapse even though the strict interest rate policy to control the course of the prices continues for over a year.
“The outlook for Europe brings a soft landing, with inflation gradually easing,” the IMF said in a report, forecasting GDP growth in the wider region to slow to 1.3% in 2023 and improve slightly in 2024. , at 1.5%. Despite the optimism, he does not foresee an immediate return of inflation to its normal levels. He even warned that this is a process that could take several years.
Analyzing these risks that may boost inflation again, the IMF warned against wage increases. He said that while they are helping Europe’s economic recovery, they also threaten to fuel further inflationary pressures – especially if they are not accompanied by improvements in productivity.
Meanwhile, structural factors such as aging demographics and a preference for fewer working days in the week mean employers are facing more intense competition to attract workers. These risks are particularly acute in Europe’s emerging economies, where wages have risen at a faster rate than in more developed parts of the region, according to the IMF report.