ECONOMY

December inflation to top 5%

december-inflation-to-top-5

Prices in Greece advanced 4.4% year-on-year last month, according to the European Union-harmonized inflation rate from Eurostat, up from 4% in November.

This points to significant growth that the national consumer price index is also expected to show when the Hellenic Statistical Authority (ELSTAT) releases its December reading next Thursday. It is expected to rise above 5%, for the first time since January 2011, when its reading was 5.2%.

Finance Minister Christos Staikouras told Skai Radio on Friday that December inflation could top 5%, and went on to estimate that the energy rate problems that have driven it higher should last up to the second half of 2022. He added that the measures tackling the energy price hikes will help, saying that they will be financed by the Energy Transition Fund.

Eurostat estimates that on the eurozone level, inflation last month reached 5%, which is a record high after a sixth consecutive month of growth. The 4.4% rate for Greece is the highest in almost 11 years, since January 2011, when the EU-harmonized rate had come to 4.9%.

The main reason for the eurozone-wide hike in prices is the soaring of energy rates, which averaged at 26% across the bloc compared to December 2020 prices. In November the annual increase had come to 27.5%.

What becomes clear from the Eurostat data is that even if the energy hikes were not as big as in November, the effects have been passed on to other commodities, such as food, alcoholic drinks and tobacco, which showed a 3.2% yearly increase in December against 2.2% in November. Non-energy industrial products increased 2.9% last month year-on-year against 2.4% in November.

December can hardly be seen to mark the end of price hikes, as all estimates by the market and institutional entities anticipate inflationary pressures to remain for at least the entire first half of 2022.

In Greece, the price lists suppliers have already forwarded to supermarkets include significant hikes on a series of basic goods, which are expected to hit the shelf by the middle of the month.