The Bank of Greece revised upwards its forecasts for Greek economic growth this year. Yannis Stournaras, the central bank's governor, presenting the bank's annual report, said that the Greek economy will grow by 2.2% in 2023 and the inflation rate will fall to 4.4%. The state budget is expected to record a primary surplus of 0.7%.
Greece is on the threshold of regaining investment grade after 12 years, declared the Governor of the Bank of Greece Giannis Stournaras to the Financial Times, while calling on the country's next government to maintain fiscal prudence.
It may, at first, look like that the monster of inflation is restrained, however with a second reading we are in the second wave of rising prices, which seems stronger and, above all, more drastic.
The market is expecting new price hikes in basic products from the beginning of 2023, which is causing strong concern among consumers.
Inflation in November narrowed to 8.5% from 9.1% in October and 12.1% in June, but prices remain higher and hikes are in full swing. Despite the reduction in inflation, prices are galloping as the problem spreads with increasing intensity throughout the economy with basic food prices registering an annual increase of 11.3% to as much as 25.3% (bread, cereals, meat, dairy, oils, coffee).
Not only are price hikes on the supermarket shelf unabated, but, based on the increased wholesale invoices that have reached the chains' books from suppliers, any deflationary trends will take a long time to see through to consumers' pockets.
And the reason is the stocks of products that were produced at a significantly higher cost. Thus, even if the de-escalation in energy inflation continues (at a 'technical' or non-technical level), the stock of more expensive consumer goods does not leave room for price cuts for quite some time.
Based on the economic climate surveys, the companies that stated that they increased their prices are constantly increasing as from 6.6% in the 2nd half of 2020, they reached 23.6% in the 1st half of 2021, to 34, 8% in the 2nd half of 2021 and to 59.2% in the 1st half of 2022.