Special consumption fees imposed on fuel, coffee, tobacco products and telecommunications beginning of the year skyrocketed consumer prices and led to the inevitable: inflation. According to Greek Statistics Authority ELSTAT inflation reached 1.5% in January from 0.3% in December.
‘This is almost a five-year high and above market expectations that were forecasting a 0.4% for January,’ Reuters notes.
I do not know how ‘markets’ make their forecasts, but real Greek life shows a different picture.
The supermarkets had massive discount offers in a plethora of goods in December. The special fees imposed as of 1.1.2017 were not immediately seen in supermarket prices but in fuel and tobaccoo products and telecommunications.
super markets kept offering discounts until around January 20th. Then the “households party” was over.
On February 1st, the price for half a kilo filter coffee went up to €7.68 from €5.46. Apparently sales stagnated, the import company lowered the price by 1 euro. A week later, the discount offer was just 50 cents.
Officially, the special fee was supposed to be 2-3 euro per kilo of roasted coffee. In real life, the increase is higher €2.12 for just half a kilo.
Similarly, the price for 400-gr package for a cocoa drink of a well known international brand went up to €3.40 from €2.60. At the same time, the cheaper soft package disappeared from the supermarket shelves. Here to note that for year the hard package used to contain 500gr. Sometime in 2010, I was badly surprised to see the package was down to 400gr, while the price remained the same.
In real life, I have to spend a total of 9 to 10 euros more per supermarket visit once a week. This makes a nice sum of 40 euro more per month. And that’s alone for the supermarket. Add the increases in other sectors and start the calculation.
In my real Greek life, every time there is an increase in fuel or in Value Added Tax, a special fee here and a special fee there, it costs me 30 to 40 euros more per month.
That the income decreases – outstanding payments are also an income decrease – every once in a while, is another story and part of another statistics I hardly see around.
“Data shows that consumer price index rose to 1.2 percent year-on-year from zero percent in the previous month, emerging from a protracted deflation trend.
For years an inflation outlier in the euro zone, Greece had been in a protracted deflation mode since March 2013 based on its headline index, as wage and pension cuts and a multi-year recession took a heavy toll on Greek household incomes.
Deflation in Greece, which signed up to its first international bailout in 2010, hit its highest level in November 2013, when consumer prices registered a 2.9 percent year-on-year decline.”
The rest is statistics, Eurozone-harmonized inflation, bureaucratic calculations, and experiments in a country where consumers have to dig deeper and deeper in their empty pockets each and every month.
Internal devaluation continues in the same pace and the same cruelty.
PS wait to see inflation for February.