Greece’s inflation rate fell sharply in July, dropping below the eurozone average for the first time in months, according to the latest data from the Hellenic Statistical Authority. But the improvement does not mean that prices are falling.
Greece’s Harmonized Index of Consumer Prices, the measure used for comparisons across the European Union, rose by 2.7 percent year-on-year in July, down from 3.9 percent in June. The index also fell 1.4 percent compared with the previous month.
The decline marked a significant easing in price pressures after inflation had climbed to 4.9 percent in May.
The figures also placed Greece below the eurozone average on the EU-harmonized measure, offering some relief to consumers after a prolonged period of rising living costs.
Inflation using a different methodology
However, the latest data require an important distinction. Greece’s national Consumer Price Index, which measures inflation using a different methodology, showed annual inflation of 3.4 percent in July.
Both figures are correct, but they measure inflation differently. The Harmonized Index is designed to allow direct comparisons among EU countries, while the national index reflects Greece’s domestic methodology and consumer basket.
For households, the most important point is that a lower inflation rate does not mean prices have returned to earlier levels. It means that prices are rising more slowly than before.
Food and services were among the areas contributing to the July slowdown, while energy costs also eased during the month. Energy prices, however, remain a potential source of renewed inflationary pressure, particularly amid continued geopolitical uncertainty and volatility in international energy markets.
The July figures could provide some encouragement to the Greek government and the wider economy, which has continued to grow despite persistent concerns about the cost of living.
Yet the improvement remains fragile. Greece has experienced repeated swings in inflation over recent years, and households are still dealing with the cumulative effect of several years of price increases.
Related: New Study Reveals the Main Factors Behind Greece’s Inflation
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