Rising energy inflation threatens to squeeze Greek household budgets and weaken spending during the second half of 2026, Eurobank warns. The bank’s September 25 analysis also identifies risks to exports, despite economic resilience through August.
The warning follows a sharp rebound in Greek inflation and renewed increases in international oil and natural gas prices. However, Eurobank’s assessment describes potential setbacks rather than an established downturn. Business surveys and consumption figures still offer evidence of economic strength.
Greece’s annual harmonized inflation reached 3.7% in August, up from 2.7% in July. The eurozone recorded a lower rate of 3.2%, according to Eurostat’s final figures. The harmonized index provides a comparable measure of consumer price changes across European countries.
Higher energy costs threaten purchasing power
Eurobank identifies two ways that sustained energy price increases could deepen pressure on households. Higher prices directly increase the cost of energy products. Businesses could also pass their additional energy expenses to customers through higher prices for other goods and services.
Together, those increases could erode households’ purchasing power and limit consumption growth. The bank’s concern centers on how much disposable income can buy as prices climb. Its analysis does not establish that households have already reduced spending because of September’s energy increases.
Oil prices illustrate the latest pressure. Eurobank calculates that Brent crude oil averaged $101.20 per barrel during September through September 22, compared with $88.10 in August. That represents an increase of 14.9%, adding another challenge after August’s inflation rebound.
The Bank of Greece also identifies renewed Middle East hostilities and disruptions along energy supply routes as sources of pressure. Its September inflation report records increases in both crude oil and European natural gas prices.
Food inflation adds to Greek household pressures
September’s energy developments pose fresh risks, but they do not explain August’s earlier inflation increase. Eurobank attributes that acceleration mainly to package holidays and accommodation services.
Services contributed 2.2 percentage points to Greece’s annual inflation rate in August. Energy added another 1.2 percentage points, making these two categories the dominant contributors. Non-energy industrial goods contributed 0.2 percentage points, while unprocessed food added 0.1 percentage points.
The Bank of Greece likewise identifies services as the largest contributor to overall inflation. Its analysis links August’s stronger services inflation to a notable increase in accommodation inflation. These findings show why energy alone cannot explain Greece’s price pressures.
Eurobank’s longer-term comparison shows how much prices have climbed since before the pandemic. Unprocessed food recorded the largest cumulative increase among the five major inflation categories, reaching 47.6%. That category includes meat, fish, seafood, fruit and vegetables.
Energy prices stood 34.7% above their prepandemic levels. Processed food, including alcohol and tobacco, followed with a 24.3% increase. Services rose 21.1%, while non-energy industrial goods increased 14.3%. These figures describe cumulative price changes, not annual inflation rates.
Despite those pressures, household consumption strengthened during the second quarter of 2026. Spending increased 0.9% from the previous quarter and 1.7% from a year earlier. The first quarter had shown a quarterly decline of 0.3% and annual growth of just 0.2%.
Goods exports also improved, rising 2.9% from the previous quarter and 6.6% from a year earlier.
Services exports followed a different path, despite healthy travel receipts. They declined 1.4% from the previous quarter and 1.7% from a year earlier. During the first quarter, services exports had grown both quarterly and annually.
Confidence surveys still show resilience
August’s business surveys offered further evidence that the economy retained momentum. Greece’s economic sentiment index reached 106.9 points, compared with 98.4 across the eurozone. Although the Greek index declined for a second consecutive month, it remained above its long-term average of 100.
Consumer confidence improved for a second consecutive month, reaching a 15-month high of minus 43.6 points. Nevertheless, Eurobank notes that confidence remained relatively low. The improvement therefore offers a positive signal without suggesting that households have overcome their concerns.
Manufacturing also maintained its strength. Greece’s manufacturing purchasing managers’ index climbed to 54.4, its highest reading in five months. Readings above 50 indicate improving operating conditions. Strong growth in new orders and employment supported August’s performance.
Those surveys, however, predate September’s renewed energy increases. They cannot yet show how the latest price pressures will affect household spending, business activity or exports. Eurobank therefore emphasizes the importance of economic releases over the coming months.
The Bank of Greece forecasts average inflation of 3.5% for 2026, easing to 2.7% in 2027 and 2.2% in 2028.
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