The annual inflation rate in Greece rose to 11.3% in May 2022, jumping to its highest level in almost three decades. A comparable increase in the consumer price index (CPI) had been recorded in 1994 (10.7%) and in 1993 (12%). The increase in the inflation rate is mainly due to the – even higher – increases in the prices of food commodities, housing and transportation.
The general consumer price index in May 2022 compared to same month last year showed an increase of 11.3%, as the National Statistical Authority (ELSTAT) announced on Thursday June 9th. Inflation rate in Greece hit its highest level in 28 years: the CPI in December 1994 increased by 10.7% and the annual rate of change of the CPI in the same year was 10.9%. In particular, inflation rate in May 1994 jumped to 10.8%. A few months earlier, in December 1993, it grew to 12%.
The general consumer price index increased 0.7% month-over-month in May 2022 compared to April 2022, against a decline of 0.4% same period last year.
Studying the historical figures from the 1960s onwards, it appears that the estimated change in the average consumer price index for 2022 (7.1%) is comparable to the change in the average annual index in 1996 (8.2%). The highest most recent change in the average annual consumer price index was in 2010 (4.7%), before the increase in the general price index starting declining at first during the recession period and then, a continuous deflation being recorded from 2013 up to 2016.
Today, inflation is “driven” in large part by the cost of food commodities, housing and transportation. For instance, consumer price index for olive oil in May 2022 averaged 126.3 points, for sugar 122.3 points, for meat 114.8 points, for bread and cereals 113.2 points, as well as for dairy products and eggs. Prices on these products have rocketed over the past months, while their increase exceeds the change in the general consumer price index.
The increase in the prices of electricity, natural gas, heating oil and solid fuels is even higher: the price index for natural gas averaged 332.3 points in May 2022, while for heating oil averaged 190.9 points, for electricity averaged 180.2 points, for diesel fuel averaged 158.7 points and for petrol averaged 152.4 points – at the time when the general price index reached an all time high of 111.80 points.
The chart below reflects the changes in the price index specifically for food commodities (excluding alcoholic and non-alcoholic beverages), electricity, petrol, natural gas, heating oil and diesel fuel over the last three years (for the period May 2019 to May 2022): the darker red the color of each field, the greater the increase in the prices of each group, compared to same month last year each time. Accordingly, the darker blue the color of each field, the stronger the decline in prices concerning that month, compared to the corresponding month of the previous year.
It is therefore obvious that the prices of basic food commodities, housing and transportation are going through the roof, with their increase being several times greater than the inflation rate. Given that the change in the general consumer price index (11.3%) is determined by taking into consideration all groups of goods and services, focusing on items necessarily consumed on a monthly basis, one can reasonably assume that the purchasing power of individuals with regular income has fallen considerably; in other words, individuals that may still keep the same pattern of consumer spending across categories, such as food, housing and transportation are experiencing significant indirect wage deflation.
Any calculations or analysis and visualizations presented here are based on data originally published by the Hellenic National Athority. The article and the charts are licensed under a Creative Commons license of use (CC BY-NC 4.0) and they are available to everyone interested, as long as it is not for commercial use. You may reproduce and/or embed them into your website by attributing creators and the source: Kelly Kiki, Konstantinos Botsi, "Greece’s inflation rate hits its highest level since 1994", iMEdD, 9/6/2022, CC BY-NC 4.0.