Τhe goal of reducing inflation to 2% for both the Eurozone and Greece has become a high-risk bet since the start of the new year, as “clouds” are already visible on the horizon.
2024 ended with the consumer price index around 2.5%-3% in Europe and Greece, while December brought a rise in many countries (and a moderate marginal decrease in Greece). Concerns are based on the new inflationary pressures and uncertainty which can affect prices.
More specifically:
- The rise of the dollar against the euro affects the prices of all imported products priced in dollars. The important product is, of course, oil. The international price of “black gold” may have remained low so far, but the price increases in oil (on Friday, Brent closed close to $80, recording the highest price level since last October) show that there is no guarantee of “cheap oil” this year.
- The entire planet is currently waiting for the situation to clear up regarding the possibility of a “trade war” with the imposition of tariffs initially by the USA. The final decisions, the products and countries that will be “targeted”, as well as the answers that will be given, will also determine the impact at a global level.
- The new year begins with the interruption of the Russian gas pipeline through the territory of Ukraine. It remains to be seen how this will ultimately affect both the price of natural gas and the corresponding price of electricity. During the year, it will be seen to what extent this change in gas supply can lead to higher gas prices, and therefore electricity. For Greece, even the demand for electricity in Ukraine plays a role. As long as the existing framework for setting electricity prices is in force, Greece will be exposed to ups and downs.
- The main determining factor for setting prices will be the climate crisis. Last year, drought and other weather phenomena brought records to coffee, cocoa, orange juice, etc. It remains to be seen whether any basic product will be “hit” this year too.
Champions of price increases in the last three years
The largest price increase in the three-year period November 2021-November 2024 concerns airline tickets (for international flights) which have increased by 115.9% (approximately 41.7% was the increase in the last 12 months) and olive oil. For the latter, the conditions may be created for a price de-escalation (in November the annual increase rate was limited to 6.4%), but for now the retail price is still double compared to the levels of two years ago.
