Inflation in Greece Climbs to 12 Percent in June, Growth Revised Downwards

Inflation in Greece reached 12 percent in the month of June from 10.5 percent in May and 9.1 percent in April, according to data released by Eurostat, the official statistical authority of the European Union announced on Friday.

The rate is the highest recorded in Greece in the past 29 years. The last time prices rose at such rapid rates was in December 1993. The Greek statistical authority ELSTAT is expected to announce the national price index on July 8th.

Inflation in the eurozone was 8.6 percent in June up from 8.1 percent in May, according to Eurostat data.

Energy costs drive inflation in Eurozone nations

The highest inflation rate is recorded in Baltic countries with Estonia at 22 percent, Lithuania at 20.5 percent, and Latvia at 19 percent. Malta and France are the two Eurozone countries with the lowest inflation. (6.1 and 6.5, respectively).

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in June (41.9 percent compared with 39.1 percent in May), followed by food, alcohol, and tobacco (8.9 percent compared with 7.5 percent in May), non-energy industrial goods (4.3 percent compared with 4.2 percent in May), and services (3.4 percent compared with 3.5 percent in May).

Bank of Greece revises downwards growth forecast

On Thursday, the Bank of Greece in its report on monetary policy revised its forecast for growth down to 3.2 percent (1.8 percent in the adverse scenario) and expects inflation for the whole of 2022 to stand at 7.6 percent.

Economic growth could turn out higher than its baseline projection of 3.2 percent if the strong performance of the first quarter continues in the subsequent quarters.

“However, the risks are tilted to the downside and relate to a further escalation of geopolitical instability, a worsening international economic climate, a disruption in energy supply and a consequent further increase in energy prices,” the report said.

The Bank of Greece expects growth to pick up to 4.1 percent next year and stay high at 3.6 percent in 2024, provided the geopolitical crisis abates by the end of 2022 and energy prices decline.

Consumption expenditure is projected to keep rising throughout this year but at a much weaker pace due to lower real disposable income and higher uncertainty, it was said.