ECONOMY

Price rises and shortages in market

Increase in the cost of raw materials and shipping puts inflationary pressure on the economy

price-rises-and-shortages-in-market

The Greek economy is suffering from the same inflationary pressures affecting the entire world, as price hikes in a series of raw materials and in shipping costs are expected to carry on until at least the end of this year, despite original estimates this would be temporary.

Even if those pressures ease any earlier, the effects will be visible for several months to come, as a series of products will have been manufactured at increased costs. The market anticipates any adjustment to prices to be at levels above those before the unrest in the global supply chain.

Consumers in the financially weaker categories of the population may well face serious problems in the coming months in the context of broader price increases as well as the shortage of certain products and more economical solutions in the market.

“The market is now short of cheap laptops,” says Kotsovolos chief executive officer Yiannis Vassilakos: “We only have models priced at €799 or more. This is because, due to the shortage in chips, producers choose to manufacture only the more expensive models,” he explains.

Shortages have also been recorded in cheaper white appliances, such as private-label refrigerators, typically produced in China. The problem there stems from the high shipping costs, which means such orders would make no financial sense.

Market professionals also tell Kathimerini that enterprises are running into unforeseeable situations: After placing their order and agreeing on the shipment from China at an increased cost, one step before loading, the final “official” charges go further up again, by up to 40% in some cases. There is often an unofficial surcharge of up to $1,000 by the loading entity in China, with the Chinese government quietly accepting it, according to market professionals.

There has only been an average 5% increase in retail prices in technology products and white appliances, attributed to existing stock and the absorption of some hikes by the suppliers and the retailers. This is likely to reach 10% as of September.