Austerity measures will push up prices

Shoppers will be faced with larger hikes in consumer prices after the government’s recently announced austerity measures worth 4.8 billion euros. Alpha Bank said in a report published yesterday that increases in value-added tax and higher levies on cigarettes, alcohol and fuel will lead to an acceleration of inflation this month. ‘Following the measures, inflation is expected to pick up further to 3.1 percent in March and 3.5 percent in April,’ the bank said. Consumer prices increased by 2.8 percent year-on-year in February. Consumption spending, which accounts for about 70 percent of the country’s economy, is expected to fall sharply due to the recession and the measures, particularly on durable goods such as cars.

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