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Greece’s Annual Inflation Rate Jumped to 6.2% in January

Greece inflation
People shopping in Varvakios Market in Athens. Credit: Dimitra Damian/Greek Reporter

Greece’s annual inflation rate jumped to 6.2 percent in January from 5.1 percent in December and -2 percent in January 2021, the Hellenic Statistical Authority said on Tuesday.

More specifically, all items included in the so-called “basket of goods” recorded price increases in the January-December period, with the exception of lamb/goat meat.

The statistics service attributed the 6.2 percent increase in the consumer price index to a 22.6 percent spike in the cost of housing on the back of rising rates in rent and utilities like electricity and heating, with natural gas posting a whopping leap of 154 percent.

There were also price increases of 5.2 percent in food/beverages, 7 percent in clothing/footwear, 3 percent in durable goods, 11.1 percent in transport, 0.9 percent in education, 1.6 percent in hospitality and 0.4 percent in other goods and services.

Inflation fed by high oil and gas prices hit record levels in Greece and in Europe for the third month in a row, extending pain for consumers and sharpening questions about future moves by the European Central Bank.

The 19 countries that use the euro currency saw consumer prices increase by an annual 5.1 percent in January, the European Union statistics agency Eurostat reported earlier in February.

The figure broke records of 5 percent in December and 4.9 percent in November and was the highest since recordkeeping started in 1997.

Higher energy bills for consumers have quickly become a political issue in Europe as governments roll out subsidies and tax breaks to soften the blow to household budgets.

Higher inflation, which makes it more expensive for people to buy everything from food to fuel, has been one factor holding back Europe’s recovery.

Greece offers subsidies to combat inflation

In January Greece extended the financial relief offered to businesses and households due to the rising energy costs.

PM Kyriakos Mitsotakis announced that the government will allocate another 400 million euros ($452 million), covering a significant part of the increases in electricity bills, in January alone.

“For another month the government will support households, farmers, and businesses in the face of the global energy turmoil,” he said.

In September, Greece offered a power bill subsidy of 9 euros ($10.19) a month for the first 300 hours consumed in the month. That was increased to 18 euros for October, to 39 euros for November and to 50 euros for December.

The total cost of last year’s relief was estimated at 1.35 billion euros. It will be funded by revenues from the country’s carbon emissions trading mechanism.

Rising inflation hits the US

Rising inflation has also hit the U.S. where it recorded a 40-year high in January and the consumer price index in January was 7.5 percent higher than it had been a year earlier.

John P. Calamos, Sr., one of the most prominent financial experts worldwide, said that rising inflation in the US causes market volatility.

Rising inflation is a “reflection of what has been happening with fiscal policy, more regulations and the cut-down of the oil supply. We have to remember we had the lowest interest rates in decades, forever almost…the biggest part of inflation was due to energy, oil,” Calamos said in a Greek Reporter interview.

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