The Minister of Development, Mr. Kostas Skrekas, as well as the Maximos Palace, hopes that with the recent package of measures, which will be fully implemented from March 1, it will not limit accuracy, but at least it will limit its rate of intensity!
Hidden
But based on the latest survey issued a few days ago by the Consumer Goods Retail Research Institute (IELKA) conducted among business executives, some findings emerge, which are hidden behind the lines….
Increase
So it follows that “food inflation” in the first half of 2024 will increase by 3%. But the downward trend in the growth rate is to be expected – as I have pointed out to you the rate has been falling since last October, month on month – but how can this estimate be established?
How;
For market people this “comes” from the sum of the rate of decline in sales volume (expected to be 1.4%) with the rate of increase in value of sales (expected to be 1.6%)!
Why;
A second question is how is it possible that the drop in sales volume in the first half of 2024 compared to the corresponding half of 2023 – it was 1.1% – while the amount of price appreciation will be only 3%? For a very simple reason. Because one in four products is sold with a discount, which ranges from 15% to 40%!
Embarrassment
The stability of prices, which the Ministry of Development is trying to impose with its measures, or even the small reduction in a number of products, of the order of 5% to 10%, is not evaluated by consumers as advantageous. Because he had learned to buy the offers….
Private label
So it will be more profitable for him to focus more on private label products. Which will continue to rise at a high rate – higher than the brands!
The timing
According to the research, the companies will continue to make revaluations. When is unclear. It is certain that they will redefine their commercial policy based on the new data. And the choice of timing of the appreciation of each product will be a function of demand….
The summer
For example, it is not excluded that they will raise prices, for example, on June 1 in order to “catch” the tourist season, when the population of the country quadruples, that is, the demand is high and they do not need offers!
Inflation is falling!
Of course, with the new measures, the government will be able to record a very large reduction in the rise of inflation. This will have an impact on the country’s official inflation. Which, however, is taken into account for eurozone inflation and is evaluated by the ECB. So simple….
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The price of electricity
I move on to another topic which is related to inflation.
I am referring to electricity and its price, which for many months due to its increase affected the course of inflation.
The energy crisis ended after Europe secured alternative sources of energy other than Russia, while the good weather was also an ally.
Prices are decreasing in our country as well, with the result that estimates show that for March the kilowatt-hour costs even below 0.10 euros/kWh.
The special levy
Another reason that will contribute to the even lower cost of electricity is the abolition of the special 5% levy that burdened the import prices of natural gas for electricity producers.
On Valentine’s Day, the law containing the provisions by which the levy ceases to be valid was gazetted.
And so essentially from the 14th of the month the 5% tax ceases to be applied to gas prices and by extension also to the cost of electricity.
The electricity producers, I learn, will pass this benefit on to their customers, the providers, who will gain even greater margins for more competitive prices for the final consumers.
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