Inflation stays at 10-year high
Greece’s headline consumer inflation rose 4.9 percent year-on-year in June, unchanged from the previous month, as rising food and oil costs kept the index at a 10-year high. The figure was below economists’ expectations, which had envisaged the consumer price index shooting up to an annual rate of 5.2 percent. The National Statistics Service (NSS) said housing costs – including rentals, repair and maintenance work – jumped 10 percent while food and non-alcoholic beverages rose by 6.0 percent. «The containment of the price index in June, despite a 3.9 percent rise in oil prices since May, is due to the reduction in prices of vegetables, potatoes and fruit, and the holding steady of supermarket prices,» said NSS chief Manolis Kontopyrakis. In June, the government had called on supermarkets to keep a lid on price increases, or even reduce them, as a means of helping fight inflation or otherwise face being blacklisted. A further breakdown of the June figures shows the cost of basic food items such as bread and flour jumping 17 and 21 percent respectively. The European Central Bank last week increased its benchmark interest rate by a quarter percentage point to 4.25 percent to counter inflation, which is running at the fastest pace in more than 16 years. The ECB is weighing the risk of higher rates exacerbating an economic slowdown against the threat of faster inflation causing a wage-price spiral. Consumer prices in the 15-member eurozone rose at an annual 4.0 percent clip in June. «An accurate forecast for July inflation is not possible because of the continuing fluctuation in oil prices,» added Kontopyrakis. «What is certain is that there will be a 0.1 percent impact from higher electricity tariffs in July.» Economists expect inflation to remain high in the coming months with a possible slowdown in the last quarter of the year. Greece’s EU-harmonized measure of inflation was also unchanged at 4.9 percent in June. Greece, which accounts for about 2.5 percent of eurozone GDP, has consistently suffered from an inflation differential that weakens its economy’s price competitiveness, posing a threat to long-term growth and employment.
