BoG raises inflation estimate

Greece’s European Union-Harmonized Index of Consumer Prices is expected to stay supra 3% successful 2025, compared to the erstwhile forecast of 2.5% reflected successful the Bank of Greece’s interim monetary argumentation report, published past June. 

According to the latest Eurosystem forecasts, revealed successful the cardinal bank’s special ostentation bulletin (Inflation Monitor) published connected Monday, the Harmonized Index of Consumer Prices is estimated to beryllium 3.1% successful Greece successful 2025 – i.e. by 0.6 percent points supra the June forecast.

The forecast for ostentation successful 2026 has besides been upwardly revised, with the caller estimation astatine 2.6% compared to the erstwhile 2.1%, while – for the clip being astatine slightest – the aforesaid estimation for 2027 remains (2.4%).

Inflation successful Greece persists astatine precocious levels, starring to the revision of estimates for this and adjacent year. The main reasons for that are the attraction of work ostentation astatine higher levels than expected, arsenic a effect of increases that person been made and are expected to proceed successful salaries, lodging rents, precocious tourism demand, and increases successful indirect taxes.

A caller investigation by National Bank, published connected September 2, points retired that the summation successful inbound tourism, which contributes importantly to GDP growth, contributes besides to terms hikes, chiefly successful services, arsenic visitors from richer countries successful Western Europe and the US amusement greater tolerance, owed to their higher purchasing power, arsenic well arsenic owed to higher prices successful their ain countries.

According to the Bank of Greece’s analysis, nutrient prices, particularly caller nutrient prices, are besides exerting inflationary pressures, with so-called nutrient ostentation proving to beryllium much persistent than expected, while precocious energy prices play a decisive role, which stopped antagonistic vigor inflation. 

Regarding residential rents, while National Bank of Greece estimates that the upward trend successful lodging prices will slow down by year-end, and adjacent much so successful 2026, it notes that a people reversal should not beryllium expected.