ECONOMY

Inflation hits nine-year peak

Consumer price index records 1.9% annual increase in August, with more hikes on the way

inflation-hits-nine-year-peak

Greece’s consumer price index climbed in August to its highest point since April 2012, rising for a fourth month in a row to reach 1.9%, the Hellenic Statistical Authority (ELSTAT) announced on Friday.

Its rise is mainly attributed to increases in the cost of energy commodities, from natural gas – whose rates have almost doubled within one year – to oil products, as well as food.

The question now is what will happen over the coming months, as all estimates and indications from the cost of raw materials, energy and shipping point to a new jump in inflation during the fall. That is because the part of the hikes concerning nondurable goods has already been absorbed – something that cannot continue for long – while as far as durable commodities are concerned, the stock bought at low prices is about to be exhausted and the new orders will be much more expensive.

Electricity rates are also expected to rise by up to 50%, while suppliers have informed retailers of upcoming hikes in a series of food products over the next few months. For instance, coffee is set to see hikes of 1 to 3 euros per kilo, and pasta will undergo increases in two stages. More hikes are anticipated for sunflower oil and cheese, with the price of white cheese likely to rise up to 15%.

In August most food categories showed price increases, such as lamb and goat (up 12.2%), fresh fish (8%), olive oil (7.1%) and mainly fresh vegetables (21.5%). Fuel and lubricants climbed 17.4%, air tickets rose 9% and hotel rates jumped 11.4%. By far the biggest hike was in natural gas, which soared 91% on an annual basis.

On the other hand, there was an annual decline last month in the price of wine (down 4.7%), breakfast cereal (4.1%), apparel (2.6%), telephone services (2.5%) and durable recreation goods (2.4%).

On a monthly basis there was a 1.1% rise in food prices and a 10.2% increase in natural gas rates. Fresh vegetables became 10.67% more expensive in August compared to July.