The price of inflation in the two years 2022-2023 is heavy [πίνακες] 2024-03-04 19:55:04

As is well known, Greece and the rest of Europe were more affected than the US due to the energy crisis caused by the war. This, because at the beginning of the crisis the E.U. it was 45% dependent on Russian natural gas and 30% on Russian oil. At the beginning of the crisis, Greece covered 35% of its needs with Russian natural gas. The country’s dependence on energy resource imports has resulted in the current account deficit reaching a record high of 9.7% of GDP at the end of 2022, before falling to 6.5% of GDP at the end of 2023 due once more to the decline in international energy prices.

Food

However, the problem of high prices continues to this day with food. Two years of continuous revaluations have accumulated increases of up to 70% in the final price of basic food products compared to 2021. Regardless of the monthly and annual variation in the consumer price index, the increases in basic food items for Greece are cumulative here and regarding two years making survival suffocating, especially on incomes up to the minimum wage.

The monthly family budget for food has reached 35% of the monthly income according to data from the Organization for Economic Co-operation and Development (OECD). Also, recent IMF research confirms that lower incomes are being squeezed more by food inflation. In fact, the survey highlights that they feel inflation of 1-1.5% above the average inflation of the month compared to the highest incomes.

After 8 years of zero or negative inflation (i.e. falling prices), Greece abruptly returned from early 2022 to a high-price regime, with incomes falling 30% below the EU average, with inflation to reach 15.6% at the end of 2022, going back 30 years to 1993.

The sharp rise in prices resulted in a steep decline in the purchasing power of housewives, especially those with incomes below the minimum wage. According to Eurostat data, at average levels the purchasing power of incomes in Greece decreased by 18.2% in 2022 compared to a loss of 2.4% for Italy.

In contrast, the countries of Eastern Europe stand out, whose purchasing power has skyrocketed in the last two decades. In terms of purchasing power units, Greece was third from end to end last year, with purchasing power at 58% of the European average.

According to the OECD, nominal wages for 2022 – despite the doubling of the minimum wage – might not balance the rapid rise in inflation that cut into citizens’ disposable income.

The average nominal gross wage in Greece in 2022 increased by 1.5% but the average real wage decreased by 7.4%, due to inflation which stood at 9.7%.

In fact, according to the international organization, the reduction of real wages last year in Greece was the fourth largest among OECD countries, following Estonia (10%), Turkey (8.8%) and the Netherlands (8.3%). ).

In 2023 the situation was a little better, with the reduction in purchasing power limited to 8% due also to the reduction in energy prices. However, the high loss, based on Eurostat, is due to the collapse of purchasing power for the poorest households due mainly to continuous food price hikes that reduce the purchasing power of households with incomes of up to 650 euros to 35%.

Government assistance

The government tried to mitigate this dramatic situation with a series of support measures for businesses and households that reached 12.1 billion euros over the two years, of which 10.6 billion euros in 2022 and 1.5 billion euros in 2023 .

In 2022, most of the money (9.1 billion euros out of a total of 10.6 billion euros) was given to subsidize electricity tariffs.

The main interventions to deal with the energy crisis concern:

● Subsidies for the consumption of electricity and natural gas by households and businesses (total fiscal cost of 8.1 billion euros).
● Refund of 60% of the increase in the cost of electricity for household invoices issued from 01/12/2021 to 30/06/2022 (fiscal cost 296 million euros).
● Increase of the heating subsidy for the winter season 2022-2023 to 300 million euros, of which 150 million euros concern the financial year 2022 and the remaining 150 million euros concern the financial year 2023 and the subsidy for heating oil and traffic (fiscal cost 311 million euros).
● Implementation of the pre-paid fuel card measure (Fuel Pass) for a total of 6 months, from April 2022 to September 2022 (fiscal cost 300 million euros).
● Subsidies for farmers and breeders due to the increased cost of fertilizers and animal feed respectively, in the reduction of VAT on animal feed and fertilizers and in the return of the motor oil tax to farmers (total fiscal cost of 212 million euros).
● Financial support for vulnerable households (low-pensioners, uninsured senior citizens of OPECA, disabled people, etc.) in April 2022 and December 2022 with the total fiscal cost amounting to 816 million euros.
● In 2023 we had the subsidy of 10% of food with a monthly cost of up to 1,000 euros (Market Pass) but also the continuation of the subsidy of electricity tariffs until last October.

Criticism from the IMF to the government because the measures were “horizontal” and “not targeted”

In a survey conducted by the IMF for Greece regarding the impact on households from the accuracy and support measures implemented by the government, it notes that they were more “horizontal” and less “targeted”.

According to the Fund, Greece took the lead in providing support measures to mitigate the consequences of increases in energy prices and high inflation in general.
In their big picture, these supports should be based on specific criteria, income and social, so as to produce the greatest possible support for those who need it. In its observations, the Fund notes that aid in Greece is more “categorized” than targeted. He typically mentions the basic measure once morest energy construction, the subsidization of electricity tariffs, which until the end was horizontal and independent of consumption.

He notes that based on this option the subsidies given were absorbed at a rate of 75% by middle and high incomes for which there was no provision for a graduated subsidy to give an incentive to save energy. In fact, it is emphasized that during the continuous revaluations of 2022, Greece avoided making controls on price increases.

	Food	Energy
January	5,50%	40%
February	7,50%	44%
March	8,90%	51,20%
April	10,20%	57,60%
May	12,70%	61%
June	12,80%	60,60%
July	13%	54%
August	13,20%	50,40%
September	13,10%	53,80%
October	15%	20,70%
November	15,20%	11,70%
December	15,60%	4,70%
2023
January	15,60%	0,70%
February	14,70%	-1,80%
March	14,10%	-14,70%
April	11,40%	-17,80%
May	11,60%	-21,10%
June	12,20%	-22,40%
July	12,30%	-20,30%
August	10,90%	-18,50%
September	9,40%	-24,80%
October	9,90%	-6,80%
November	9,60%	-4%
December	8,90%	-2,20%
Sources: ELSTAT, Eurostat

Istanbul: Permanent Tsunami Warning Signs – Lekkas: Can reach 10 meters

Earthquake in Kefalonia: The good and bad scenario – What Gerasimos Papadopoulos says

The first registry registration of a child of a same-sex couple was signed in Greece

Mitsotakis contacted the first same-sex couple who got married following the new law

Thessaloniki: Menios Fourthiotis was arrested following a lawsuit by his father Nikos Koklonis

Knife attack in Ermou: The 22-year-old student is in shock – What were her first words

Thessaloniki – revenge porn: a 52-year-old man was sending pink videos with his ex to her partner