Consumers in despair: Galloping inflation is emptying the “family basket”

The pressure of rising prices is getting tighter and tighter, with Greek households – and especially the most vulnerable – not only finding it difficult to pay their exorbitant electricity bills, but also reluctant to fill the supermarket basket.

In the last three months, from mid-November 2021 until today, and despite the return of offers and promotions, the average price of potatoes has increased by 47%, spaghetti 23%, olive oil over 10%, fresh milk and cheese 8%, cold cuts 5%, and detergents 4%.

When food items constitute 35.9% of the total monthly expenditures of the poorest households, based on the data of the Family Budget Survey of the Hellenic Statistical Authority (for non-poor households the corresponding percentage is 22.2%), the revaluations in the basic food products become unbearable.

It should be noted that according to the Foundation for Economic & Industrial Research (IOBE) Business and Consumer survey for the month of January, the percentage of consumers who state that “as soon as they make it” amounted to 65%.

Inflation – record highs

The course of inflation with the breaking of another record in the index is expected to be officially certified by tomorrow’s publication by the Hellenic Statistical Authority of the January Consumer Price Index.

Already, according to preliminary data from the European Statistical Office for Greece, inflation in January is likely to reach the “barrier” of 6% from 5.1% in December.

6.6% increase in three months

A basket of 20 name brand products on November 13 cost 46.61 euros based on the average prices presented on the electronic platform e-Consumer of the General Secretariat of Commerce and Consumer Protection. The bill for the same basket on February 12 was 49.70 euros, with the percentage increase reaching 6.6%, although in some products due to offers the prices decreased.

When will de-escalation take place?

At a time when inflation has skyrocketed to 2010 levels, but a year in which nominal wages in Greece were higher than they are today, the large 29.4% increase in production costs in industry in December has already set the course. of revaluations for the first quarter of the year.

The messages from the Food and Agriculture Organization of the United Nations (FAO) regarding the international prices of raw materials remain ominous, with the FAO food price index reaching 135.7 points in January 2022, increased by 19 % compared to January 2021.

By category, meat prices increased by 17%, dairy prices by 19%, cereals by 12%, oils by 34% and sugar by 20%.

In the domestic market, the changes affect the food production in Greece due to the imported raw materials, but also the imports of final food and beverages from the international markets.

With these data, market participants report that any signs of de-escalation of inflation will not be seen before July.

The financial staff, for their part, is examining various scenarios to find a way to protect households from price gouging on basic items.

Extraordinary subsidies to the most vulnerable households – possibly through coupons – seem to be the preferred scenario, although no final decision has been made yet.