The impending rise in inflation is a cause for concern in general but there are also factors that seem to be betting on it, as strange as it may sound.
In a few hours, ELSTAT is expected to announce the detailed inflation data for the month of October 2023, where the greatest interest is expected to be gathered in food prices, which essentially affect and worry the average Greek.
The wave of accuracy has not only not stopped, but is expected to continue and even more intense, especially in what concerns food.
The “black mantas” for inflation were brought by the governor of the Bank of Greece, Giannis Stournaras himself, who predicted a new rise in the consumer price index before there would be a permanent and stable de-escalation.
Many others speak of “greed inflation” accusing many multinationals as well as domestic companies of unjustified price hikes, which violently improve their results even before the end of the year.
One should not forget that last year’s revaluations caused a decrease in real household incomes, recorded at 2% for Greek households in 2022, based on ELSTAT data.
The next “victim” was, of course, consumer demand, with retail sales volume recording a significant drop even in August this year.
According to the data announced a few days ago by the Hellenic Statistical Authority (ELSTAT), the turnover index in retail trade increased in August 2023 compared to August 2022 by 2.4%.
At the same time, however, sales volume fell by 3.6%, which essentially proves that turnover growth is inflationary. This is particularly evident in the case of food stores, where the turnover recorded an increase of 8.4%, while the volume index decreased by 0.7%.
Citizens, however, should not expect a bold and efficient reduction in their income, as the economic staff has stressed in every way that the target of achieving a primary surplus in 2023 at 1.1% and in 2024 at 2% will not be shaken. ,1%.
The country is in a phase of spending cuts as growth alone cannot provide the required government revenue to operate both pillars.
On the other hand, a new major disturbance in energy prices internationally may trigger new negative data on inflation.
Who can hope for higher inflation?
First of all, the Greek government itself. High inflation has also worked positively since it has given a big boost to tax revenues.
It is characteristic that the excess of VAT revenues in relation to the target reaches 779 million Euros in the nine months.
But citizens are being tested. Characteristically, tax revenues were not satisfactory in September.
In addition, accuracy appears to lead to a rise in nominal GDP, which is associated with a reduction in public debt.
The Greek government will therefore seek as much consistency as possible in the repayment of taxes but also to stimulate consumption, so that indirect taxes continue to yield more than the amount that has been budgeted since last year.
Whether it will achieve both of these goals simultaneously remains to be seen.
