Economy Roaring Back, But Greeks Strapped Over Supermarket Prices

inflation

ATHENS – Nothing has dented the popularity of Greece’s ruling New Democracy – not scandals, a deadly train wreck or summer fires and floods critics partially blamed on the government – and not even soaring prices for food

But many Greek households are feeling the pinch and griping about it, with a 13 per cent Value Added Tax (VAT) applied to most foods and as high as 24 per cent on some – along with income tax rates that hit a punishing 44 per cent.

Combined with inflation, rents and mortgages out of reach for many households as Greece’s Golden Visa program giving rich foreigners residency to buy properties limited the supply and driving up the demand, it’s the Big Squeeze.

In a feature, Germany’s state broadcaster Deutsche Welle (DW) reported on how difficult it is for Greeks and other residents to cope with the rising prices and the government trying to curb profiteering and gouging.

“The money I now spend in the supermarket to buy three day’s worth of food for my family, last year was enough for an entire week’s worth of groceries,” Anna Petropoulou told the news site.

https://www.dw.com/en/greece-cost-of-living-growing-prohibitively-expensive/a-67300533

A 49-year-old Greek mother of three, she said going to the supermarket brings dread even though she and her husband earn fairly well by Greek standards and live in a condominium.

She said the surge in food prices – now made worse by those fires and floods that hit the country’s agricultural heartland – has made them watch every euro cent when they’re in the market and picking carefully what they purchase.

A 500-gram (1.1 pound) bag of coffee cost at least 2 euros ($2.14) more than a year earlier, while milk and Greek yogurt – the world’s best and a staple for the Greek diet- have almost doubled or more.

Most kinds of bread and eggs cost at least 30 per cent more, and some imported goods – like Heinz beans from the United States – have doubled to 2.60 euros ($2.79) a can, too much for many households and families with multiple mouths.

Most irritating to Greeks perhaps is that the country’s most noted commodities and the world’s best – like feta cheese and olive oil produced within a few miles of some markets, are also too expensive to buy unless switching to cheaper brands.

Feta is now around 12 euros ($12.87) a kilo (2.2 pounds), up as much as 4 euros ($4.29) from six months earlier and showing no signs of sliding even though the government pressured supermarkets to create so-called Household Baskets to hold down prices on 51 essential items.

“I feel poor when I visit the supermarket,” Petropoulou said. While she thinks Greek Prime Minister Kyriakos Mitsotakis is doing a good job, she gets angry when he claims Greece is making economic progress. “Apparently, I am living in a different country,” she told the news site.

CONSPICUOUS NON-CONSUMPTION

Mitsotakis has his eyes fixed firmly – perhaps singularly – on pushing an economic recovery in the wake of the waning COVID-19 pandemic and a 2010-18 financial and austerity crisis and drove growth to 5.9 per cent in 2022.

“Greece is now one of the fastest growing economies in Europe, with increasing employment, falling inequalities and improving public finances,” he said at a European Central Bank (ECB) meeting, without mentioning the food prices.

Greece’s comeback is filling state coffers even though most Greeks pay little or no taxes, evading cost, and Petropoulou said she hasn’t seen any benefits from major companies setting up shop in Athens and Greece, from from Golden Visa monies.

Inflation that has fallen after soaring is still a big factor and cutting into real purchasing power; the Greek statistics bureau ELSTAT reported food prices rose 9.4 per cent in September alone.

The European Union’s statistics agency Eurostat said inflation rose 3.9 per cent in October, presenting Mitsotakis with another problem for the rosy recovery picture he’s painting that hasn’t helped many Greek households.

“I used to buy fruit and vegetables from the weekly market because everything is cheaper and the quality is right, but now prices there are very high,” Katerina Kefala, a teacher, told DW.

Statistics show that the cost of vegetables rose 17.7 per cent in September and fruit by 13.9 per cent. Kefala, who earns about 1,100 euros ($1180) monthly and doesn’t see any raises coming, said she’s struggling to balance the budget.

The food prices have also been shown at near-daily open-air street markets known as Laiki, where competition is still between farmers who rise before dawn to set up their stalls in city neighbourhoods.

With gasoline costing about 2 euros ($2.14) per litre ($8.08) a gallon – more than double the current average of $3.49 in the United States- the farmers must factor in those costs when travelling long distances to cities.

“Customers are struggling with the higher prices and buying less and less. Traders cannot afford to raise prices any further but are seeing their profits shrink. It’s a vicious circle,” said DW.

It’s been a boom time for the supermarkets, though, and they have shown no signs of cutting back the prices, although they’re now being pushed to do so, with many consumers switching to cheaper and generic brands.

Many, though, complain about the poor quality of produce priced cheaper and what’s really rankling Greeks is the cost of olive oil – most of it exported to other countries, particularly Italy, branding it as their own.

In late 2022, a litre (33.8 punches) of average quality olive oil cost 4.80 euros ($5.50), and now it’s as much as 11-15 euros ($11.81-$16.10) for good quality Extra An average Greek household of four, for context, consumes about 60 litres (15.85 gallons ) of olive oil per year and all that’s combining to raise the peeve level of Greeks who see almost everything going up.

A recent survey by the firm Pulse found that 86 per cent of people were fairly or very concerned about the prices, and almost half said they are most worried about being able to provide good food for their families.

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