In recent months there has been a steady upward trend in prices around the world. Characteristic is the evolution of the level of inflation on a monthly basis.
As is evident from Table 1 from January 2021 onwards, there is a continuous increase in the price level in Greece as well, with inflation reaching 1.9% in August.
The chart after August 2021 continues with quarterly data showing inflation estimates as emerging from Oxford Economics until 2025. It is clear that based on these estimates inflation is not expected to exceed the target of 2% in the next years.
Recently, due to this development, we are watching a series of publications that talk about the risks that accompany the increase in inflation and that most likely by 2021 inflation in Greece will reach a decade high, close to 2.5%.
The picture observed for the Eurozone is similar, with inflation moving at higher levels than those of Greece, reaching 3% in August 2021 (based on provisional estimates by Eurostat).
This means that inflation is already well above the European Central Bank (ECB) target for inflation of 2%, with the ECB reassuring, however, that inflation is higher due to higher oil and commodity prices as well as and the lack of components, such as microchips, caused by the pandemic and that from next year it should be expected to decrease again.
Table 2 presents the latest estimates of Oxford Economics, Focus Economics and Consensus Economics on the expected level of inflation for 2021 and 2022 for Greece.
Despite the increase in recent months, it is clear that the picture presented by the three reliable organizations in terms of forecasts is much more optimistic about the level of inflation in 2021. 2 out of 3 organizations (Consensus Economics and Focus Economics) do due to zero inflation and Oxford Economics for inflation of 0.6% for the whole year.
* Panagiotis E. Petrakis – Professor of EKPA / Department of Economics
* Pantelis Ch. Kostis (Ph.D.) – EKPA / Department of Economics