ECONOMY

Hikes seen to be temporary

hikes-seen-to-be-temporary

Inflationary pressures will be temporary, Finance Minister Christos Staikouras assured on Monday, though he admitted that the 3% rise in the consumer price index last month was higher than the government’s projections.

Speaking to state broadcaster ERT, Staikouras said the pressure on prices will start to ease across the entire range of products (with the exception of energy) in early 2022. In energy, the decline will take time and should start becoming apparent from the second quarter of next year.

The minister acknowledged that the increase in disposable incomes (thanks to tax reductions) recorded by the Hellenic Statistical Authority (ELSTAT) for the April-June 2021 period, is largely offset by the price hikes.

Staikouras appeared reserved regarding any further support measures, for which there are significant expectations ahead of the final budget draft. He explained that the likely higher growth rate (above the 6.1 the government currently anticipates) in 2021 does not automatically translate into additional fiscal space, given that the country has a primary deficit amounting to 7.3% of its gross domestic product. He said the state has already overspent to support households and enterprises, but the situation will be reassessed in 2022.