BUSINESS

GDP is low, but food prices are high

DIMITRA MANIFAVA

TAGS: Economy, Taxation

Greeks may be among the poorest citizens in the European Union, but that does not mean low prices for basic products and services in this country.

According to figures published on Wednesday by Eurostat, Greece was the 17th most expensive country among the 28 EU member-states last year, with the general price level standing at 84 percent of the EU average. However, in the most basic category – food – price levels in Greece stood above the bloc’s average, having a significant negative impact on living standards.

Eurostat figures had shown on Tuesday that the per capita gross domestic product in Greece in 2017 amounted to just 67 percent of the EU average, while real private consumption stood 23 percent below the EU mean rate.

A key role in food prices remaining at such high levels – in spite of the decade-long crisis – has been played by a succession of hikes in the value-added tax: From a 9 percent rate on food imposed in 2009, many food products now bear a VAT rate of 24 percent, making Greece the 13th most expensive country for food across the bloc.

High indirect taxes also explain the particularly high prices in tobacco and alcoholic beverages in Greece, which make this country the 12th most expensive in the EU in this category.

Online