
The government, businesses and households are in a conundrum over the wave of price increases that is unfolding in Greece as a result of the international energy crisis.
The government may have already allocated almost 7.5 billion euros to date to limit price increases related to energy and fuel costs for households and businesses, but it seems that the ongoing price rally is exhausting any effort to relieve at least the economically weaker while at the same time creating risks to the entire economy.
The wave of inflation has swept businesses and households in the last year. Within a year, specifically between September 2021 and September 2022, the prices of natural gas increased by 332%, electricity by 30.5%, dragging with them the prices of a series of basic products and services.
Inflation at 12%
With inflation at 12% and increases in meat, dairy, oils, transport services being in double digits in the month of September, businesses and households are facing significant liquidity problems and talk of an inevitably difficult winter ahead.
More than a few households now choose to cover their obligations for energy and supermarket items and postpone obligations to the State, insurance funds and banks or redefine their decisions about possible purchases and even investments. In fact, the fear of a new generation of overdue debts is visible as the increase in inflation “gnaws away” at everyone’s incomes.
Red loans
According to bank estimates, a 20% reduction in borrowers’ disposable income may lead to the risk of a new generation of bad loans amounting to 400-600 million euros, which will require additional provisions of 100 million euros. In fact, even if at this stage they consider these amounts manageable, they do not hide that they are anxiously monitoring the developments. Both the ECB, the SSM and the EBA have already warned about the risks of inflation, the rise in interest rates and the uncertainty they lead to, due to the reduction in disposable income and liquidity for businesses and households.
This uncertainty, in turn, changes the landscape in relation to consumer behavior and investment interest, especially in the real estate market. According to an ECB study, a one-point rise in interest rates causes house prices to fall by 9% after about two years. Correspondingly, an increase in ECB interest rates by one point causes a decrease in real estate investment by 15%. This environment, combined with the uncertainty that exists, poses significant risks to commercial real estate, residential and consumer credit financing.


Latest News

Inflation in Greece at 3.1% in March, Eurostat Reports
Average inflation in the eurozone settled at 2.2%, compared to 2.3% in February

Greece’s Unemployment Rate Drops to 8.6% in February
Despite the overall decline, unemployment remains higher among women and young people.

Jerry Kalogiratos Highlights Key Role of Energy Transition and Data Demand in LNG Outlook
Energy transition and the prospects of LNG were discussed at Capital Link’s 19th Annual International Maritime Forum, during a panel discussion with Jerry Kalogiratos (Capital Clean Energy Carriers Corp.)

Santorini Safe and Ready for a Dynamic Tourism Season
Authenticity, cultural heritage, and genuine experiences at the center of Santorini's new promotional campaign

Electricity Bills: Greece Announces Reduced Tariffs Schedule
Greece will now offer lower electricity rates between 11:00-15:00 and 02:00-04:00

Chevron Confirms Eyeing Natural Gas Exploration South of Crete
Chevron recently declared its intent to explore a third area, south of the Peloponnese.

Evangelos Marinakis: A time of change from which shipping can benefit
Speaking at the 19th Annual Capital Link International Shipping Forum Evangelos Marinakis stressed the challenges that shipping faces today

Retail Trade in Greece Up 2.5% in December 2024: ELSTAT
In January 2025, the General Turnover Index recorded a 2.5% increase compared to January 2024. Compared to December 2024, it recorded a significant decline of 18.4%

Greek Fruit and Vegetable Exports Surge
Greek exporters have expressed concerns over a new draft law in Bulgaria that mandates at least 50% of products in stores to be of Bulgarian origin.

Trump Tower in Greece? Speculation Grows Over Potential Investment
In 2007, the Trump Organization explored the possibility of constructing a skyscraper complex and casino at the former Ellinikon Airport site in Athens