ECONOMY

Prices on basic products to rise

prices-on-basic-products-to-rise

Households are bracing for a further drop in their disposable incomes and retailers for a further decline in demand, following a lower-than-expected market performance over the festive season. This was not only due to a reduction in activity caused by the surge of the coronavirus, but also because of the new price hikes that are expected to hit shops and consumers in the coming weeks.

After inflation exceeded 5% in December – with the official Hellenic Statistical Authority announcement set for this Thursday – all estimates point to an expansion of inflationary pressure until at least the end of the year’s first half.

In its latest monetary policy report, the Bank of Greece warned that “the recent price hikes are expected to be passed onto consumers in less than a year,” adding that these “price hikes may be quite large.”

The price increases the new year is about to bring concern a series of basic commodities at supermarkets and come in the wake of more hikes over recent months. 

According to the price lists suppliers have forwarded to supermarket chains, the following categories of commodities are going to see significant increases: Flour, cheese, cold cuts, butter, dairy products, cereal, pasta, coffee, sugar, olive oil, tea, chocolate, baked goods, tomatoes and canned tomatoes, bread and rusks, eggs, vinegar, frozen seafood, frozen dough, frozen vegetables including potatoes, garbage bags, toilet and kitchen paper, napkins and washing detergents.

Price increases across these categories are expected to be passed onto the shelf as of mid-January. In some cases the hikes will be above 10%, even though categories such as olive oil, coffee, flour, pasta, dairy, cheese and washing powder have already seen significant increases in the last few months.

There is no sign on the horizon of an easing yet, given that the international electricity and natural gas markets remain unstable, therefore any slide in global rates end up being just temporary. At the same time, the cost of raw materials such as soy, coffee, cotton, wood and others remains at high levels, which means that supply contracts will likely continue on the expensive side.