Undoubtedly, a key factor that inflation in prices consumer in Greece It runs faster than the eurozone is the persistent accuracy observed in the services.
For April, while the general price index in Greece slowed to 2.7%, services increased at a steady pace compared to March, at 5.2%.
Indeed, while in the rest of the eurozone the services are expensive, in Greece the pace is disproportionately high. Characteristics, for general inflation increased at a rate of 2.2% in the eurozone, services increased by 3.9%, while in Greece the difference reaches 2.5 percentage points.SI
The great source of concern lies in the fact that in our country now begins the tourist season, which especially during its climax during the summer months ejects the demand for services, and thus their price, pushing the inflation overall.
Thus, the high levels of increases observed, and will soon be observed, in the service sector, almost “cancel” the decline in prices in other areas, such as the “dip” in April, by 4.9%, and a lesser slowdown in industrial goods and foods.
Greek ‘peculiarity’
The factors that keep the services higher in the Greek economy were recently highlighted by the report by the BoG Governor.
As mentioned above, the fact that Greece has an economy largely based on tourism, in high demand for its product, which is even ejected at such heights and generates such tourist revenue that few countries, especially in the European South, can overcome.
Thus, although it is a key component of Greek GDP, tourism is a central driving force for the rise in inflation in services, catering, hospitality, and more widely, and it is widely expected to have a strong upward effect on prices every summer.
A second key factor is about the fact that in these categories of services, a very large number of employees is paid the minimum wage (for example, it is very common to pay only to pay the minimum wage, and simply to supplement their income).
This means, however, that these sectors have taken on all the burden of increasing wage costs of recent years, as they were for minimum wages (without even average salaries being supported), resulting in the enlarged costs of remuneration.
A third decisive factor is the fact that these sectors are directly linked, and incorporated, the large increases that have taken place in previous years into energy and food. The latter, despite their relative stabilization, have not returned and would not be back on the immediate horizon to return, in their inflationary crisis prices, with the result that the “sellers” of relevant services and consumers have to face much more “pinched” prices on the market.
The image is even more complicated if the cost of the rents that, as a market in Greece, is overwhelming, requires other types of more central strategic decisions, as it is a problem of bid.